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Currency in EUR
Last close As at 17/03/2023
EUR2.62
▲ 0.30 (12.93%)
Market capitalisation
EUR97m
Research: TMT
For FY22, MotorK reported a record Q4, driven by its focus on higher-value enterprise contracts, the launch of its SparK platform and the continued migration of acquired companies onto the platform. Annualised recurring revenue (ARR), management’s main metric for tracking performance, was €26.9m, falling short of our €28m forecast and management’s guided range of €28–30m. FY23 and beyond looks set to benefit from a large pipeline of contract opportunities, with €5.2m of additional ARR committed as at 31 December 2022. Growth should be supported by maintaining low customer churn and high net revenue retention.
MotorK |
Promising signs for 2023 |
FY22 trading update |
Software and comp services |
26 January 2023 |
Share price performance
Business description
Analysts
MotorK is a research client of Edison Investment Research Limited |
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For FY22, MotorK reported a record Q4, driven by its focus on higher-value enterprise contracts, the launch of its SparK platform and the continued migration of acquired companies onto the platform. Annualised recurring revenue (ARR), management’s main metric for tracking performance, was €26.9m, falling short of our €28m forecast and management’s guided range of €28–30m. FY23 and beyond looks set to benefit from a large pipeline of contract opportunities, with €5.2m of additional ARR committed as at 31 December 2022. Growth should be supported by maintaining low customer churn and high net revenue retention.
Year end |
Revenue |
ARR* |
PBT** |
Diluted EPS** (€) |
DPS |
EV/Sales |
EV/EBITDA (x) |
12/20 |
19.3 |
10.0 |
(6.1) |
(0.19) |
0.00 |
1.4 |
N/A |
12/21 |
27.6 |
15.1 |
(8.2) |
(0.37) |
0.00 |
1.0 |
31.5 |
12/22e |
44.1 |
28.0 |
(0.2) |
(0.00) |
0.00 |
0.6 |
4.7 |
12/23e |
60.9 |
38.3 |
3.8 |
0.07 |
0.00 |
0.4 |
2.4 |
Note: *Annualised recurring revenue. **PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
FY22 ARR of €26.9m, including €9.7m from M&A, was up 40% organically y-o-y and up 78% y-o-y including M&A but fell short of management’s guided range of €28–30m and our €28m forecast. Q422 ARR increased by €5.1m/25% q-o-q. 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 and covers half of the ARR growth we have factored in for FY23.
MotorK reported revenue of €13.6m for Q422 (+103% y-o-y) and €38.5m for FY22 (+40% y-o-y, Edison forecast €44.1m), or €40.6m pro-forma, which includes a full year contribution from acquired companies. As per our initiation, we believe ARR is a more accurate metric to track the company’s performance, as IFRS15 accounting can cause significant volatility of reported revenue.
FY22 average contract value (ACV), a driver of ARR, was €17.8k (+19% y-o-y), reflecting growth in customer multi-product adoption helped by new product launches. Customer churn reduced in the year by 2pp to 4.5% and the net revenue retention rate, which includes up-sells, customer churn and price increases, grew by 17pp to 122%, showing that management is delivering on its land and expand strategy. The move from a multi-product strategy to a single SparK platform in Q422, as well as continued new product launches, should further improve ACV growth by making it easier to cross- and up-sell to customers. Additionally, now that most of the investment in its platform is complete, MotorK enters FY23 with the opportunity to build on profitability through stronger operating leverage.
Although no balance sheet figures were given in the trading update, we believe its net cash position would have been bolstered by the sale of its B2C DriveK, which had a net book value of €3m at H122.
We plan to update our forecasts following FY22 results on 23 February.
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Research: Healthcare
Respiri has released its Q223 quarterly activity report and provided a business update for the quarter. The second quarter was characterised by improving commercial traction for Respiri, with the company signing three new contracts for wheezo (including Minnesota Lung Center and Arkansas Heart Hospital), taking the total client count to six at the end of the period. Respiri’s wearable device Sorfe also continues to make progress with clinical studies anticipated to commence by March/April 2023. The recent announcement of a A$1.5m capital raise (with the option to increase the offering size based on investors interest) is expected to extend the company’s cash runway to Q423, based on current burn rates. With patient onboarding ongoing at multiple sites, we expect initial cash inflows from device sales and RPM services in the coming months, which should help scale up commercial activities and likely expand the cash runway further.
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