Spread the love
Post Views: 5

ELMO Software Limited (“ELMO”) today announced results for the half year ending 31 December 2020, reporting strong growth in annualised recurring revenue (“ARR”), statutory revenue, cash receipts and customers.

Group ARR grew 42.8% to a record $74.2 million, driven by organic growth and acquisitions.
Statutory revenue rose 29.3% to $30.6 million. Over 97% of revenue was subscription based, which is recurrent in nature. Cash receipts grew 25.5% to $34.4 million. After the acquisition of Breathe, a small business platform, ELMO is pleased to provide separate metrics for each of the mid-market and small business segments.

ELMO’s mid-market business continued to grow strongly, to 2,892 customers, up 95.7% pcp. Midmarket ARR grew to $67.3 million, up 29.5% pcp. Statutory revenue grew to $28.9 million, up 22.5% pcp. The mid-market gross profit margin increased to 88.5%, up from 84.6% pcp. New customers purchased an average of 4.0 modules at 31 December 2020.

In the small business segment, Breathe grew its customer base to 7,146 at 31 December 2020. Gross profit margin remained high, at over 90%.

ELMO remains well capitalised to fund growth initiatives. In addition to $71.3 million cash on hand,
ELMO has secured a new $34.5 million debt facility.

CEO and Co-Founder Danny Lessem said: “ELMO’s growth journey continued in 1H21 as we delivered on our stated growth strategy.

Our growth strategy is underpinned by three pillars: segment expansion, module expansion and
geographic expansion.

Segment expansion:
With the acquisition of Breathe, ELMO now services two distinct market segments, the small business market (<50 employees) and the mid-market (50 to 2,000 employees). The small business market segment is a new $2.2 billion opportunity.

Module expansion:
We continue to broaden ELMO’s all-in-one solution, offering new modules to our new and existing
customers. These new modules create additional revenue streams and increase our competitive moat.

In the half, we were able to add an expense management module to the suite through the acquisition of Webexpenses, providing a significant cross-sell opportunity.

Geographic Expansion:

In 1H21 we also laid important foundations to build out ELMO’s business in a new geography, the United Kingdom (UK). The acquisitions of Breathe and Webexpenses are powerful examples of ELMO expanding its market opportunity in line with its growth strategy. Both businesses are based in the UK. Breathe places ELMO as the preeminent provider of HR solutions to small businesses in the region and Webexpenses provides a solid operational and mid-market customer base there.
ELMO is well capitalised with robust cash levels and a new debt facility.

We remain well placed to benefit from the tailwinds in the adoption of cloud-based business tools,
including HR-technology.”

Outlook

ELMO reaffirms the guidance provided in January 2021:

A$m Guidance
ARR 81.5 – 88.5
Revenue 65.0 – 71.0
EBITDA (2.4) – (7.4)

Results Webcast
ELMO management will host a webcast to discuss the result at 9.30am (Sydney AEDT),
16 February 2021.

Webcast link:
http://bit.ly/ELMO1H21ResultsWebcast

Participants are encouraged to pre-register for the webcast. A replay of the webcast will be available

shortly after the event on the ELMO investor website:
https://investors.elmosoftware.com.au/Investors