Hipages Group (HPG) H2 2024 earnings summary

Executive summary

• Achieved a key milestone with the launch of Hipages Tradiecore in April 2024, integrating lead and job management into a single app, with positive early engagement and further features planned for FY25.

• FY 2024 marked an inflection point, delivering sustainable growth in revenue, EBITDA, and free cash flow, with record marketplace activity and platform engagement.

• Positive free cash flow of AUD 2.1 million, a turnaround from -AUD 2.8 million in FY 2023, with a strong cash balance of AUD 21.3 million and no debt.

• Strategic shift from marketplace to platform, highlighted by Tradiecore launch and migration of customers to new platform and pricing models.

• FY25 targets set for continued double-digit revenue growth and further margin expansion.

Financial highlights

• Recurring revenue grew 15% year-over-year to AUD 72.1 million; MRR up 13% to AUD 6.4 million.

• Operating revenue increased 14% to AUD 75.3 million; total revenue up 13% to AUD 75.8 million.

• EBITDA before significant items rose 33% to AUD 16.4 million, with margin up four points to 22%.

• Net profit after tax before significant items was AUD 0.1 million, reversing a prior AUD 2.3 million loss; statutory NPAT reached AUD 3.7 million, aided by PropTech Labs disposal.

• ARPU increased 11% to AUD 2,079; subscription tradies up 3% to 36,700.

Outlook and guidance

• Targeting continued strong revenue growth and further EBITDA expansion in FY 2025, with guidance for low to mid-teens revenue growth and 1-2 percentage point margin expansion.

• Free cash flow guidance for FY 2025 is AUD 4-6 million, assuming stable macroeconomic conditions.

• Net subscription growth expected to remain consistent with FY 2024, with potential uptick as Tradiecore adoption improves retention in H2 FY 2025.

• Ongoing investment in technology, with tech spend as a percentage of revenue expected to decline by about 1% per annum.