Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: TMT
MotorK’s FY22 results showed a 40% y-o-y increase in reported revenue and a 78% increase in annual recurring revenue (ARR, 40% organic growth), driven by new enterprise contract wins, higher retail average contract values (ACV) and contributions from newly acquired companies. Customer churn remained low, while net retention benefited from higher levels of cross- and up-selling, underpinned by multi-product adoption. Higher marketing and R&D costs affected cash in FY22 but should support operating leverage from FY23 now that most of the investment is complete.
Written by
MotorK |
Cash-generative strategy in place |
FY22 results |
Software and comp services |
1 March 2023 |
Share price performance
Business description
Next events
Analysts
MotorK is a research client of Edison Investment Research Limited |
||||||||||||||||||||||||||||||||||||||||||||||
MotorK’s FY22 results showed a 40% y-o-y increase in reported revenue and a 78% increase in annual recurring revenue (ARR, 40% organic growth), driven by new enterprise contract wins, higher retail average contract values (ACV) and contributions from newly acquired companies. Customer churn remained low, while net retention benefited from higher levels of cross- and up-selling, underpinned by multi-product adoption. Higher marketing and R&D costs affected cash in FY22 but should support operating leverage from FY23 now that most of the investment is complete.
Year end |
Revenue |
ARR (€m) |
PBT* (€m) |
Diluted EPS* (€) |
DPS (€m) |
EV/sales (x) |
EV/EBITDA(x) |
12/21 |
27.6 |
15.1 |
(8.2) |
(0.37) |
0.00 |
3.4 |
112.9 |
12/22 |
38.5 |
26.9 |
(8.8) |
(0.22) |
0.00 |
2.4 |
402.8 |
12/23e |
55.8 |
39.0 |
2.8 |
0.05 |
0.00 |
1.7 |
6.4 |
12/24e |
67.8 |
51.9 |
8.8 |
0.16 |
0.00 |
1.4 |
4.0 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
FY22 results
MotorK’s FY22 reported revenue grew by 40% y-o-y to €38.5m, or €40.6m pro forma including a full 12-month contribution from acquired companies. ARR of €26.9m was up 40% organically y-o-y (up 78% y-o-y including M&A), but below our estimate of €28m. Growth was driven by enterprise contract wins and a 20% y-o-y uplift in ACV among its retail clients to €17.8k. Continued customer multi-product adoption underpins the growth in ACV and could be further catalysed by its SparK platform (launched Q422). Investments in SparK drove an 82% y-o-y increase in total R&D costs to €14.3m, leading to a €9.6m increase in cash EBITDA loss (a free cash flow proxy) to €15.6m. Now that most of these investments are complete, the company is well positioned for margin expansion as it continues to scale.
Outlook and updates to forecasts
We have increased our FY23 ARR forecast by 2% to €39m (management’s guidance: €39–43m). The company closed FY22 with an additional €5.2m of committed ARR (more detail in our last Flash note), covering c 43% of the ARR growth we have factored in for FY23. Our FY24 forecasts indicate another 33% rise in ARR to €51.9m, driven by cross- and up-selling through its SparK platform to drive higher ACV. Our FY23 cash EBITDA forecast is within management’s guidance at a loss of €6.8m, a €3m improvement from our previous forecast, underpinned by the confirmation that it has now completed the planned investments in the platform. Stronger operating leverage could move the company to a positive cash EBITDA position by FY24 (our forecast: €1.6m), which should strengthen its balance sheet.
Valuation: Start of 2023 providing positive signs
On EV/sales, MotorK trades at an average discount to peers of 59% across FY23e and FY24e, significantly less than the 89% average in our last update, benefiting from its share price almost doubling in the year to date. Management's progress towards profitable growth could help further close this discount to peers.
FY22 results summary and forecasts
As per its January trading update, MotorK reported FY22 revenue and ARR below our forecasts (see Exhibit 3), with its record Q4 performance not enough to offset the impact of the longer sales cycles seen in the second half of the year. However, the company closed FY22 with an additional €5.2m of committed ARR: this is ARR from contracts that have been signed but not yet implemented and billed. It includes contractual price increases and enterprise deals.
Total operating costs before depreciation and amortisation (D&A) were broadly in line with our forecast, with investments in research and development (R&D) and sales and marketing (S&M) offset by high levels of capitalised development costs (€8.7m versus our €6.9m forecast). Lower revenue and higher D&A resulted in a normalised operating loss of €7.8m compared to our €0.3m profit forecast.
M&A and lower profitability in FY22 resulted in a €28.0m reduction in net cash to €6.3m, which was partly offset by the sale of its B2C DriveK business in Q422 for €3m, in line with the net book value we stated in our latest Flash note. We also note the company has completed €1.8m of share repurchases to date, out of the potential €3m buyback programme first announced on 18 July 2022.
In its FY22 results, management also started reporting cash EBITDA as a proxy for free cash flow, providing a useful metric to monitor its progress towards its goal of improving profitability and cash generation. We provide a reconciliation from adjusted EBITDA (which excludes share-based payments and exceptional costs) to cash EBITDA in Exhibit 1, accounting for the cash costs related to capitalised development costs and movement in contract assets.
Exhibit 1: Reconciliation from adjusted EBITDA
(€'000s) |
FY21 |
FY22 |
FY23e |
FY24e |
Adjusted EBITDA |
835 |
234 |
14,751 |
23,615 |
– capitalised development costs |
3,490 |
8,707 |
9,606 |
10,482 |
– change in contract assets |
3,376 |
7,154 |
11,948 |
11,486 |
Cash EBITDA |
(6,031) |
(15,628) |
(6,802) |
1,647 |
Source: MotorK, Edison Investment Research
Contract assets represent the difference between the revenue recognised at the start of a contract (under IFRS 15), which typically has a two-year lifespan, and the amount billed for each reporting period. During times of growth, contract assets can exceed the change in recurring revenue from year to year due to increases in ACV from cross- or up-selling. The appendix of our initiation has more information on MotorK’s revenue recognition.
Finishing FY22 positioned for growth
Since 2019, MotorK’s revenues have grown at an average of 44% a year, primarily driven by the investments made in module development and supported by accretive M&A. Bar FY20, the company’s net retention rate (NRR) has remained over 100%, highlighting the success of its land and expand strategy. In FY22, NRR reached a high of 122%, driven by management’s ability to cross- and up-sell to customers.
The acquisitions of Dapda, FranceProNet, Fidcar, Carflow and WebMobil24 during FY21 and FY22 have supported new module development, but more importantly enabled the company to diversify its customer base across Europe. During FY22, its operations in Spain and France saw strong triple-digit revenue growth of 196% and 187% respectively, and more than 55% of the company’s ARR is now generated outside of its Italy core market (FY21: 37%).
|
Exhibit 2: Revenue, ARR and margin progression, FY20–24e |
|
|
Source: MotorK, Edison Investment Research |
Investments in growth have limited margin expansion, with higher levels of development and marketing costs leading to an FY22 adjusted EBITDA margin of 1% (Exhibit 2).
Management has announced that the platform’s major investments are now completed, after a significant expansion of its employee base, positioning the company for strong margin expansion as it continues to scale. We forecast an adjusted EBITDA margin of 26.5% in FY23e and 34.8% in FY24e.
Stronger profitability and cash flow expected
Management believes that the company has hit critical mass and is now in a position to benefit from operational leverage and top-line growth, which we have reflected in our cash and profit forecasts for FY23e and FY24e.
For FY23e, we have increased our adjusted EBITDA forecast to €14.8m (+€3.8m) at a margin of 26.5%, as we have factored in slower employee growth for the year as indicated by management. We have also increased our estimate for capitalised development costs from €7.5m to €9.6m, based on growth from the level capitalised in FY22. In FY24, we estimate that adjusted EBITDA will grow to €23.6m at a margin of 34.8%, which means that the company is well on track to achieve its >40% margin target in FY26, as discussed in our initiation.
As show in in Exhibit 2, higher profitability should help reduce cash burn from the level seen in FY22 and we expect the company to achieve positive cash EBITDA in FY24. This should strengthen the company’s balance sheet, helping to provide funds for internal and external investment. Net cash at year-end was €6.3m, comprising gross cash of €19.2m and total financial liabilities of €12.9m. Currently, MotorK’s main source of debt is a bank loan from Illimity, which matures in FY24. Management stated that it is seeking a dedicated debt facility to support its M&A strategy, which it still sees as a vital component of its growth strategy.
Exhibit 3: Summary of forecast changes
€'m |
FY22 |
FY23e |
FY24e |
|||||||||
Estimate |
Actual |
Change |
Old |
New |
Change |
y-o-y |
Old |
New |
Change |
y-o-y |
||
Revenues |
44.1 |
38.5 |
-12.6% |
60.9 |
55.8 |
-8.4% |
44.7% |
73.4 |
67.8 |
-7.6% |
21.6% |
|
Adjusted EBITDA |
5.6 |
0.2 |
-95.8% |
11.0 |
14.8 |
34.4% |
N/A |
17.2 |
23.6 |
37.2% |
N/A |
|
Adjusted EBITDA margin |
12.7% |
0.6% |
-12.1% |
18.0% |
26.5% |
8.4% |
25.8% |
23.5% |
34.8% |
11.4% |
8.4% |
|
Cash EBITDA* |
(8.9) |
(15.6) |
75.0% |
(9.8) |
(6.8) |
-30.8% |
-56.5% |
(5.0) |
1.6 |
N/A |
N/A |
|
Cash EBITDA margin |
-20.2% |
-40.5% |
-20.3% |
-16.1% |
-12.2% |
3.9% |
28.3% |
-6.8% |
2.4% |
9.2% |
14.6% |
|
Normalised operating profit |
0.3 |
(7.8) |
N/A |
4.4 |
3.4 |
N/A |
N/A |
9.0 |
9.4 |
N/A |
N/A |
|
Normalised operating profit margin |
0.7% |
-20.2% |
-20.9% |
7.3% |
6.0% |
-1.2% |
26.2% |
12.3% |
13.8% |
1.5% |
7.8% |
|
Reported operating profit |
(3.7) |
(12.9) |
243.2% |
0.6 |
1.8 |
N/A |
N/A |
7.4 |
7.8 |
N/A |
N/A |
|
Reported operating margin |
-8.5% |
-33.4% |
-24.9% |
1.0% |
3.2% |
2.2% |
N/A |
10.1% |
11.4% |
1.4% |
8.2% |
|
Normalised PBT |
(0.2) |
(8.8) |
4734.2% |
3.8 |
2.8 |
-27.7% |
N//A |
8.4 |
8.8 |
3.9% |
216.2% |
|
Reported PBT |
(4.3) |
(13.9) |
226.3% |
0.0 |
1.2 |
N/A |
N/A |
6.8 |
7.2 |
5.7% |
496.5% |
|
Normalised net income |
(0.2) |
(8.9) |
5644.7% |
3.1 |
2.2 |
-27.7% |
N/A |
6.4 |
6.7 |
3.9% |
200.4% |
|
Reported net income |
(3.9) |
(7.3) |
87.6% |
0.0 |
1.0 |
N/A |
N/A |
5.2 |
5.5 |
5.7% |
466.7% |
|
Normalised basic EPS (€) |
(0.00) |
(0.22) |
5672.5% |
0.08 |
0.06 |
-27.0% |
N/A |
0.16 |
0.17 |
4.9% |
200.4% |
|
Normalised diluted EPS (€) |
(0.00) |
(0.22) |
5672.5% |
0.07 |
0.05 |
-27.1% |
N/A |
0.15 |
0.16 |
4.9% |
200.4% |
|
Reported basic EPS (€) |
(0.10) |
(0.18) |
88.5% |
0.00 |
0.02 |
N/A |
N/A |
0.13 |
0.14 |
6.7% |
466.7% |
|
Dividend per share (€) |
0.00 |
0.00 |
N/A |
0.00 |
0.00 |
N/A |
N/A |
0.00 |
0.00 |
N/A |
N/A |
|
Net debt/(cash) |
(12.9) |
(6.3) |
-51.2% |
(2.4) |
(1.9) |
N/A |
N/A |
11.3 |
4.4 |
-60.6% |
N/A |
|
ARR |
28.0 |
26.9 |
-3.9% |
38.3 |
39.0 |
1.8% |
45.0% |
51.7 |
51.9 |
0.3% |
33.0% |
|
Source: MotorK, Edison Investment Research. Note: *Cash EBITDA is adjusted EBITDA less change in contract assets and R&D capitalisation, providing a proxy for free cash flow.
Exhibit 4: Financial summary
€m |
2019 |
2020 |
2021 |
2022e |
2023e |
2024e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||||
Revenue |
|
|
27.9 |
19.3 |
27.6 |
38.5 |
55.8 |
67.8 |
Annualised recurring revenue |
|
|
7.5 |
10.0 |
15.1 |
26.9 |
39.0 |
51.9 |
Operating costs excl. D&A |
(26.5) |
(20.5) |
(26.7) |
(38.3) |
(41.0) |
(44.2) |
||
EBITDA |
|
|
1.5 |
(1.1) |
0.8 |
0.2 |
14.8 |
23.6 |
Normalised operating profit |
|
|
(0.8) |
(4.3) |
(3.4) |
(7.8) |
3.4 |
9.4 |
Amortisation of acquired intangibles |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
(0.0) |
(0.1) |
(3.2) |
(3.5) |
0.0 |
0.0 |
||
Share-based payments |
(0.2) |
(0.1) |
(9.7) |
(1.5) |
(1.6) |
(1.6) |
||
Reported operating profit |
(1.1) |
(4.5) |
(16.4) |
(12.9) |
1.8 |
7.8 |
||
Net Interest |
(1.4) |
(1.8) |
(4.8) |
(1.0) |
(0.6) |
(0.6) |
||
Joint ventures & associates (post tax) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
(2.3) |
(6.1) |
(8.2) |
(8.8) |
2.8 |
8.8 |
Profit Before Tax (reported) |
|
|
(2.5) |
(6.3) |
(21.2) |
(13.9) |
1.2 |
7.2 |
Reported tax |
1.1 |
0.9 |
(2.8) |
(0.1) |
(0.2) |
(1.7) |
||
Profit After Tax (norm) |
(1.1) |
(5.2) |
(11.0) |
(8.9) |
2.2 |
6.7 |
||
Profit After Tax (reported) |
(1.4) |
(5.4) |
(23.9) |
(14.0) |
1.0 |
5.5 |
||
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Discontinued operations |
1.6 |
0.0 |
0.4 |
6.7 |
0.0 |
0.0 |
||
Exceptionals |
(0.0) |
(0.2) |
(0.0) |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
(1.1) |
(5.2) |
(11.0) |
(8.9) |
2.2 |
6.7 |
||
Net income (reported) |
0.2 |
(5.5) |
(23.5) |
(7.3) |
1.0 |
5.5 |
||
Basic average number of shares outstanding (m) |
26 |
27 |
30 |
40 |
40 |
40 |
||
EPS - basic normalised (€) |
|
|
(0.04) |
(0.19) |
(0.37) |
(0.22) |
0.06 |
0.17 |
EPS - diluted normalised (€) |
|
|
(0.04) |
(0.19) |
(0.37) |
(0.22) |
0.05 |
0.16 |
EPS - basic reported (€) |
|
|
0.01 |
(0.20) |
(0.79) |
(0.18) |
0.02 |
0.14 |
Dividend (€) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
||
Revenue growth (%) |
128.8 |
-30.8 |
42.6 |
39.9 |
44.7 |
21.6 |
||
EBITDA Margin (%) |
5.3 |
-5.9 |
3.0 |
0.6 |
26.5 |
34.8 |
||
Normalised Operating Margin (%) |
-3.0 |
-22.3 |
-12.3 |
-20.2 |
6.0 |
13.8 |
||
BALANCE SHEET |
||||||||
Fixed Assets |
|
|
22.8 |
16.8 |
26.2 |
53.2 |
56.5 |
60.4 |
Intangible Assets |
11.2 |
9.9 |
18.0 |
35.9 |
36.2 |
34.5 |
||
Tangible Assets |
1.6 |
1.7 |
3.1 |
5.0 |
2.0 |
1.9 |
||
Investments & other |
10.1 |
5.2 |
5.2 |
12.4 |
18.3 |
24.1 |
||
Current Assets |
|
|
25.4 |
28.3 |
63.4 |
42.8 |
48.7 |
51.0 |
Stocks |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Debtors |
16.0 |
11.5 |
16.0 |
23.6 |
33.8 |
42.5 |
||
Cash & cash equivalents |
9.4 |
11.8 |
43.3 |
19.2 |
14.9 |
8.5 |
||
Other |
0.0 |
4.9 |
4.2 |
0.0 |
0.0 |
0.0 |
||
Current Liabilities |
|
|
(13.6) |
(14.5) |
(15.2) |
(18.8) |
(25.2) |
(29.6) |
Creditors |
(11.1) |
(6.1) |
(8.3) |
(14.3) |
(20.6) |
(25.1) |
||
Tax and social security |
0.0 |
0.0 |
(2.9) |
(0.8) |
(0.8) |
(0.8) |
||
Short term borrowings |
(2.5) |
(7.1) |
(2.7) |
(3.6) |
(3.6) |
(3.6) |
||
Other |
0.0 |
(1.3) |
(1.3) |
(0.1) |
(0.1) |
(0.1) |
||
Long Term Liabilities |
|
|
(27.1) |
(28.5) |
(10.0) |
(16.3) |
(18.5) |
(12.4) |
Long term borrowings |
(23.5) |
(25.6) |
(6.2) |
(9.3) |
(9.3) |
(9.3) |
||
Other long term liabilities |
(3.7) |
(2.9) |
(3.8) |
(7.0) |
(9.2) |
(3.1) |
||
Net Assets |
|
|
7.5 |
2.1 |
64.4 |
60.9 |
61.4 |
69.4 |
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Shareholders' equity |
|
|
7.5 |
2.1 |
64.4 |
60.9 |
61.4 |
69.4 |
CASH FLOW |
||||||||
Net income |
0.2 |
(5.4) |
(23.5) |
(7.3) |
1.0 |
5.5 |
||
Depreciation & amortisation |
2.7 |
3.8 |
4.2 |
8.0 |
11.4 |
14.2 |
||
Working capital |
(7.4) |
2.5 |
(2.0) |
(6.5) |
(7.6) |
(16.1) |
||
Exceptional & other |
1.6 |
1.9 |
15.0 |
(0.6) |
2.2 |
2.2 |
||
Tax |
(0.1) |
(1.2) |
2.6 |
(0.0) |
0.0 |
0.0 |
||
Net operating cash flow |
|
|
(3.0) |
1.7 |
(3.6) |
(6.5) |
6.9 |
5.8 |
Capex |
(3.6) |
(3.2) |
(3.9) |
(9.1) |
(9.9) |
(10.8) |
||
Acquisitions/disposals |
(0.6) |
0.0 |
(5.4) |
(5.4) |
0.0 |
0.0 |
||
Net interest |
(0.5) |
(0.5) |
(6.9) |
(1.1) |
(0.5) |
(0.5) |
||
Equity financing |
0.0 |
0.0 |
70.1 |
(0.7) |
0.0 |
0.0 |
||
Dividends |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
(0.1) |
0.1 |
0.2 |
(4.4) |
0.0 |
0.0 |
||
Net Cash Flow |
(7.8) |
(1.9) |
50.5 |
(27.2) |
(3.5) |
(5.5) |
||
Opening net debt/(cash) |
|
|
8.5 |
16.6 |
20.9 |
(34.3) |
(6.3) |
(1.9) |
FX |
(0.2) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other non-cash movements |
0.0 |
(2.4) |
4.7 |
(0.8) |
(0.8) |
(0.8) |
||
Closing net debt/(cash) |
|
|
16.6 |
20.9 |
(34.3) |
(6.3) |
(1.9) |
4.4 |
Source: MotorK accounts, Edison Investment Research
|
|
Research: Healthcare
Following its Q223 cash flow report in February, Incannex has reported detailed interim H123 results. The period was mainly focused on enhanced clinical efforts across its drug development portfolio, including initiation of a bioavailability and bioequivalence study for its lead clinical asset IHL-42X, a positive pre-IND meeting with the FDA on IHL216A (for concussion and traumatic brain injury) and the completion of patient dosing in the Phase I trial of IHL-675A. IHL-675A is being considered for rheumatoid arthritis (RA), inflammatory bowel disease and lung inflammation, and the company started a Phase II study in late February 2023 in RA. We expect continued clinical progress over CY23, including anticipated IND applications and additional clinical study starts. With the recent private placement of A$13m (US$8.7m), the company’s net cash position stood at A$41.4m (US$27.8m), which, based on our estimates, provides a cash runway to the second half of FY24. We value Incannex at US$745.8m or US$11.75/ADR (US$736.6m or US$11.7/ADR previously).