‘On track’: Fineos share price climbs 6% on strong quarterly

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The Fineos Corporation Holdings PLC (ASX: FCL) share price is rising during late afternoon trade on Thursday.

This comes after the insurance software company announced its fourth quarter results to the market.

At the time of writing, Fineos shares are swapping hands at $1.715, up 6.52%.

What did Fineos report for Q4 FY22?

Here’s a brief recap of how the company performed for the 3 months that ended 30 June 2022.

  • Cash receipts from customers up 45% year-on-year to €32.9 million ($A48.04 million)
  • Headcount up 1% to 1,075 since 30 June 2021
  • High product consulting employee utilisation rate of 89% for FY22
  • Cash payments from operating activities of €32.4 million (A$47.32 million), up 12% quarter on quarter
  • Closing cash balance of €44.3 million ($A64.70 million) and no debt

What happened during the quarter?

For the final quarter of FY22, Fineos recorded customer cash receipts of €32.9 million ($A48.04 million). This reflected a 45% increase over the prior corresponding period, underpinned by strong revenue growth and the ongoing transition of customers to subscription agreements.

Subsequently, this reaffirms the company’s FY22 revenue guidance of between €125 million to €130 million (A$182.56 million to A$189.87 million) and subscription revenue growth of at least 30%.

Furthermore, headcount decreased by 0.5% to 1,075 for the quarter but lifted by 1% during FY22. This is expected to remain stable at the current level in FY23.

Capitalised R&D costs for the quarter were down 2% to €6.8 million (A$9.93 million) and up 3% to €25.8 million ($37.67 million) for FY22.

Uncapitalised R&D costs continued to increase in line with Fineos’ growth strategy and focus on product development.

What did management say?

Fineos founder & CEO, Michael Kelly commented on the company’s performance:

The fourth quarter saw the company continue to deliver on our growth strategy, with strong growth in customer cash receipts and subscription revenue underpinning the reaffirmation of previous guidance provided for FY22.

We finished the quarter with over €44 million in cash and no debt, providing a strong capital position that supports our organic growth plans. With the business continuing its growth trajectory and cash flows building, we are on track to achieve a positive free cash flow position in FY24.

Fineos share price review

Since the start of 2022, the Fineos share price has declined by more than 60%.

Strong volatility on the ASX and a gloomy economic outlook appears to have weighed down the company’s shares this year.

Based on today’s share price, Fineos presides a market capitalisation of around $530.18 million.

The post ‘On track’: Fineos share price climbs 6% on strong quarterly appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended FINEOS Corporation Holdings plc. The Motley Fool Australia has recommended FINEOS Corporation Holdings plc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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