EROAD has posted $45.8 million in revenue for the six months to September 30, up 19% from the same period a year prior.
Net profit after tax was up 1200% to $1m compared to a loss of $100,000 in the year prior for the ASX/NZX dual-listed company.
Earnings before interest, tax, depreciation and amortisation (EBITDA) was up 29% to $15.3m.
The transportation technology services firm had some key highlights for the period including listing on the Australian stock exchange (ASX) and launching its new products, EROAD Day Logbook, EROAD Go and EROAD Clarity Dashcam.
The company successfully raised $53m via a private placement ($42m) and an oversubscribed share purchase plan ($11m) in the ASX listing.
Meanwhile, it grew contracted units to from 108,414 to 122,193 and increased average monthly revenue per unit (ARPU) from $57.60 to $58.80 from the same period a year prior.
“In a period of extreme uncertainty and operating restrictions across our markets, the continued growth in contracted units, stable SaaS Average Revenue Per Unit and asset retention rate is reflective of EROAD’s strong customer value proposition,” EROAD chief executive Steven Newman says.
EROAD chair Graham Stuart says telematics solutions are becoming more essential for customers.
“As the pioneer of regulatory telematics, we are in the ideal position to find and deliver the solutions to their problems. Now is the time to be bold and accelerate our growth strategies to capture the significant growth opportunity for EROAD once uncertainty recedes,” Stuart says.
EROAD’s asset retention rate remained steady at 95% for the six months. Annualised monthly recurring revenue metric (which provides a forward view of revenue) increased from $84m at March 31, 2020 to $84.8m as at September 30, 2020, reflecting the growth in both new units and SaaS average revenue per unit, partly offset by foreign exchange translation impacts.
Operating expenditure increased from $27.5m to $30.5m period on period reflecting increased research and development operating expenditure and other investments.
New Zealand
New Zealand was the least impacted of EROAD’s markets by COVID-19 restrictions, and growth rates in the markets returned to pre-COVID-19 levels relatively quickly once restrictions were lifted. New Zealand revenue increased by 13% period on period to $27.4m and EBITDA increased period on period by 14% to $18.5m. The growth in units of 4,160 since 31 March 2020 was driven predominantly from new customers across a range of industries with medium sized fleets, as well as further extension into the fleets of several larger existing customers.
North America
Revenue for North America increased by $2.6m to $13.9m and EBITDA increased period on period from $3.2m to $5.9m. North America’s growth slowed adding only 1292 units during the period, reflecting the challenging market conditions. The majority of these units added were from new customers. The launch of ‘EROAD Go’ and ‘EROAD Clarity Dashcam’ are considered critical steps in further expanding the North America addressable market and being able to win more medium and enterprise customers.
Australia
Growth in Australia was also heavily impacted by COVID-19 restrictions, particularly in Victoria. During the six-month period a total 253 units were added. Revenue for the Australian business was $0.5m, compared to H1 FY19 of $0.3m. EBITDA saw a loss of $0.4m as EROAD continues to invest into the market to support future growth.
H2 FY21 and FY22 Outlook
Looking ahead to the second half of the financial year, EROAD is anticipating a small increase in revenue compared to the first half. EBITDA is anticipated to be similar to the first half’s figure (adjusted for one-off items) reflecting the acceleration of product development and increased sales and marketing costs associated with the launches of key products.
For FY22, EROAD anticipates that the percentage revenue growth in FY22 will strengthen, but not be at the level experienced in FY20. In New Zealand, EROAD expects similar growth to the last four years. In North America, targeting an increased addressable market through improved product market fit, to deliver increased unit growth. In Australia, growth during the next two years will come predominantly from an enterprise pipeline of 15-20,000 vehicles.
As EROAD continues to accelerate new product delivery for future growth in FY23 and FY24, it anticipates spending 24-27% of revenue on R&D during FY22. However, the company anticipates EBITDA margin to be maintained but improving at the end of FY22, to provide further increased EBITDA margin.
