• Annual Recurring Revenue (ARR): GBP21 million, with a consistent CAGR of about 14% since IPO.

• EBITDA Margin: Approximately 40% for Virtual Cabinet.

• Cash Position: Healthy cash balance with a GBP2 million debt facility in place.

• SmartVault Revenue Growth: 8% year-on-year for H1 2024.

• ARR Growth: 5% increase at constant currency.

• Gross Margin: Above 89%.

• Churn Rate: 9.9% across the group.

• Net Revenue Retention: 99.7%.

• Cash Flow: Typical net cash outflow in H1 due to renewal cycles; expected R&D tax credit receipt delayed.

• Warning! GuruFocus has detected 3 Warning Sign with FRA:1H91.

Release Date: September 05, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• GetBusy PLC (FRA:1H91) has maintained a consistent CAGR of about 14% since its IPO in 2017, growing its ARR from approximately GBP3 million to GBP21 million.

• The company has a strong balance sheet with a healthy cash balance and a GBP2 million debt facility, ensuring it is well-capitalized for future growth.

• GetBusy PLC's Virtual Cabinet business unit is highly profitable, with EBITDA margins of about 40%.

• The company is expanding its addressable market by targeting new customer types with greater financial characteristics, leading to higher average sale prices and lower churn rates.

• GetBusy PLC is investing in AI to enhance its applications, leveraging a rich data set of over a billion unique documents to provide intelligent features like smart prioritization and document summarization.

Negative Points

• ARR growth in the first half of 2024 was below expectations, indicating potential challenges in achieving medium and long-term goals.

• The company experienced a 4% reduction in paying users, contributing to softer growth than in previous periods.

• Consolidation in the UK accounting market has negatively impacted growth, with two significant customer churn events in the first half of the year.

• The integration with Thomson Reuters' UltraTax is expected to take a couple of years to achieve mass adoption, delaying potential growth acceleration.

• The company has not yet received its expected R&D tax credits, impacting cash flow in the first half of the year.

Q & A Highlights

Q: The half-year results reconfirmed revenue expectations of just under GBP23 million, implying an acceleration of revenue growth in H2. Do you expect this revenue growth to come primarily from SmartVault or from Workiro? A: The growth is expected to be a combination of both. Key initiatives include expansion through the unlimited plan, enhanced partner sales to the Thomson Reuters base, and continued efforts within the Intuit space. Additionally, the SmartVault acquisition is anticipated to contribute significantly to H2 growth. H2 is traditionally a busy season for us as accountants start looking for tech solutions.