Integrated Research Expects Strong Financial Performance in FY25 H1
INTEGRATED RESEARCH LIMITED (IRI) Share Update January 2025 Thursday 16th
Integrated Research Projects Strong Finish for FY25 H1
Integrated Research Limited (ASX: IRI) has released an optimistic trading update for the first half of FY25, projecting revenue and EBITDA at the upper end of its previous guidance.
Instant Summary:
- Total contract value (TCV) and statutory revenue expected at upper guidance range.
- EBITDA projected to exceed previous guidance, despite a 62% decline from prior year.
- Significant increase in new business TCV, up 77% from previous corresponding period.
- Cash at bank remains steady at $31.1 million.
- Stronger renewals book anticipated in the second half of the financial year.
Financial Performance Overview
Integrated Research has announced that for the six months ending December 31, 2024, both total contract value (TCV) and statutory revenue are expected to be at the upper end of the previous guidance range. TCV is anticipated between $26 million to $27 million, while statutory revenue is projected between $28 million to $29 million.
Despite a softer renewals book in the first half, the company has seen a significant boost in new business, with new clients and upsells accounting for 29% of total TCV, marking a 77% increase over the previous corresponding period (PCP).
EBITDA and Cost Management
EBITDA is expected to exceed previous guidance, ranging from $3.9 million to $4.5 million, although this represents a 62% decrease from the PCP. This includes a $2.1 million benefit from foreign exchange translation and a $1.2 million profit from the sale of a non-core business.
Cash at bank remains steady at $31.1 million, demonstrating the company's disciplined cost management despite restructuring costs and dividend payments.
Outlook and Strategic Focus
Looking ahead, Integrated Research anticipates a stronger renewals book in the second half of the financial year. The company continues to focus on its product-led growth strategy, aiming for an elevated growth rate through increased contributions from new business.
The announcement suggests a positive outlook for Integrated Research, with revenue and EBITDA expected at the upper end of guidance. This could bolster investor confidence, potentially stabilizing the company's stock price despite the year-over-year declines in key financial metrics.
Investor Reaction:
Analysts may view the significant increase in new business TCV as a positive indicator of the company's growth strategy. However, the substantial decline in EBITDA compared to the previous year might raise concerns about long-term profitability.
Conclusion:
Investors should keep an eye on the company's detailed interim results scheduled for release on February 20, 2025, to better understand the financial dynamics at play. Integrated Research's strategic initiatives and cost management will be crucial in maintaining investor trust and driving future growth.