Category: Stock Market

IOOF Holdings Limited (ASX: IFL) shares are slumping today despite the company revealing its funds under management increased by $1.5 billion over the past quarter. At the time of writing, the IOOF share price is trading 0.56% lower at $3.57.

IOOF is a financial services company that provides advisers and their clients with financial advisory services, portfolio management and administration, and investment management products.

Let’s take a look at what its quarterly update reveals.

How has IOOF been performing?

The IOOF share price is on the slide after the company released its third-quarter (Q3) FY2021 business update to the ASX this morning. The company advised that funds under management, advice and administration (FUMA) was up by $1.5 billion to $203.9 billion for the quarter to 31 March 2021.

“Favourable market conditions” created a $5.4 billion market uplift, according to the company. The $267 million in net inflows from portfolio and estate administration represents a significant jump from the $180 million generated in the prior comparative period.

The company reported $1.4 billion in net outflows through its financial advice arm, and outflows of $2.1 billion from 53 advisers departing IOOF’s self-employed advice businesses, as the company previously envisaged. IOOF is expecting a further 140 of these advisers to exit the business over the coming months.

In its investment management portfolio, the company reported $507 million in net outflows, including $469 million in outflows due to “AET cash product simplification”. It also noted $782 million in net outflows through the company’s pension and investment funds.

Management comments

IOOF CEO Renato Mota said the fund had performed well and was focusing on improving key areas:

We continue to deliver on the transformative agenda for the business. The strength, scale and economic diversity of our business model has supported this solid quarter and increase in FUMA.

Our Portfolio & Estate Administration segment saw positive net flows again. We continued to deliver organic growth in our contemporary platform offerings and we have seen continued expansion in the independent financial adviser (IFA) market

IOOF share price snapshot

The IOOF share price has been a pretty volatile performer over the past 12 months and has declined significantly since its yearly high of over $5.18 in July 2020. IOOF shares are up by less than 2% in 2021 so far but have risen by around 3% over the past week.

More reading

• Why the IOOF (ASX:IFL) share price is on watch today

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The WISR Ltd (ASX: WZR) share price has rocketed nearly 7 per cent higher this morning after reporting 275 per cent revenue growth.

Why is the Wisr share price surging?

Wisr this morning provided a trading update for the quarter ended 31 March 2021 (Q3 2021). Wisr reported an “accelerated” Q3 2021 of new loan originations, revenue growth and loan book quality metrics.

Operating revenue was a record $7.5 million for the quarter, up 275 per cent on Q3 2020 numbers. It was also a 27% increase on the $5.9 million booked in the December quarter.

Wisr has now posted 19 consecutive quarters of loan book growth. Third quarter loans totalled $97.8 million, up 151% on Q3 2020 and 17% on Q2 2021. The Aussie financial wellness provider reported “consistently low” 90+ Day arrears at 0.83%.

Secured vehicle loan products are now sitting at $21.9 million or 22.5% of the $97.8 million book. The Wisr share price has rocketed higher on the back of the update, jumping 6.8% at the open where it remains at the time of writing.

Wisr said the Q3 2021 results “exemplified the success of the Wisr Financial Wellness Platform and its impact on Wisr customers’ financial wellbeing”. The company said it remains strongly capitalised with $35.5 million in cash and liquid loan assets. 

Wisr also executed a $21.5 million unsecured corporate loan facility during the quarter which will include drawdown at Wisr call. It also upsized its $350 million warehouse loan funding facility during the March quarter. This has allowed the loan book to continue growing, helping push the Wisr share price higher during the quarter.

Offshore, Wisr said its strategic investment in Arbor EU provides a pathway to the A$1.76 trillion European consumer finance market. Wisr’s upfront consideration is $400,000 cash with further investment subject to Arbor achieving milestones.

The Wisr share price is rocketing higher on the back of yet another strong quarterly update from the Aussie financial wellness group.

More reading

• Wisr outshines Cash Converters (ASX:CCV) share price on loan book updates
• Why the Wisr (ASX:WZR) share price is on the move
• Why the Wisr (ASX:WZR) share price is on watch

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Dacian Gold Ltd (ASX: DCN) share price is one ASX share to watch today. Shares in the Aussie gold miner have dropped 5.4% in early trade after the company’s latest quarterly update.

Why is the Dacian Gold share price slumping?

The big news today was Dacian’s latest production and activities numbers. Dacian reported March quarter production of 21,400 ounces of gold at an all-in sustaining cost (AISC) of $1,874 per ounce. Those numbers came from the Mt Morgans Gold Operation (MMGO) output with year to date production of 81,361 ounces.

Managing Director Leigh Junk said, “While we were anticipating that production for the March quarter would be our lowest for the financial year, the result was below expectations”.  The disappointing result came as material movement productivities were below expectations due to operator shortages amid a tighter Western Australian labour market.

The Dacian Gold share price has tumbled lower on the back of this morning’s disappointing quarterly update. That’s despite Dacian maintaining FY2021 guidance of 110,000 to 120,000 ounces at an AISC of $1,400 to $1,550 per ounce.

The Aussie miner reported cash and gold on hand of $28.3 million at the quarter end having repaid $2.0 million of debt during the quarter.

Dacian completed more than 30,000 metres of exploration and resource definition drilling during the quarter. Mineral Resource estimation is underway across its Jupiter, Westralia, Mt Marven and Redcliffe mining areas.

Dacian also said Ore Reserve estimation activities are underway ahead of an updated Life-Of-Mine plan due in the September quarter.

Foolish takeaway

Investors have smashed the Dacian Gold share price on the back of this morning’s quarterly miss. Shares in the gold miner slumped more than 5% at the open in a tough week for ASX gold shares.

The St Barbara Ltd (ASX: SBM) share price was smashed on Wednesday after a disappointing quarterly result for the major Aussie producer.

More reading

• Could the Apple (NASDAQ:AAPL) share price make it the first $3 trillion company?
• What has the Australian Strategic Materials (ASX: ASM) share price achieved this quarter?
• Why this top broker just upgraded the battered St Barbara (ASX:SBM) share price to “buy”
• Why the LiveTiles (ASX:LVT) share price is crashing 12% lower
• Why the Rhipe (ASX:RHP) share price is racing 5% higher today

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Apple Inc (NASDAQ: AAPL) share price will be a hot topic today after the biggest company in the world released its results for the second quarter. Not only were they impressive… they were astonishing – beating analysts’ expectations by significant margins.

Hence, I pose the question, could Apple be the first US$3 trillion company. I’ll run through the results and let you decide for yourself. At the time of writing, the Apple share price is 2.36% higher at US$136.73 in after-hours trade.

Huge demand across all products

When it comes to Apple’s products, it isn’t a one-trick pony. Anyone who has an iPhone will understand how easy it is to fall into the Apple ecosystem. Before you know it, the Apple Watch, Airpods, iPad, and Macbook are all expediting money out of the back pocket. This means, when one breaks, it’s almost impossible to reach beyond the Apple fortress for an alternative.

This, in addition to refreshes in the product line-up, has helped the company achieve double-digit growth in all of its product categories. iPhone sales jumped 65.5% from last year. While computers and iPad sales lunged 70.1% and 79% higher respectively.

The truly mind-blowing aspect of this is we’re not talking millions of dollars of sales. No, this is tens of billions of dollars’ worth of sales. Apple’s total revenue increased 53.7% year over year (YoY) to US$89.58 billion. This was more than 15% higher than analysts’ forecasts of US$77.36 billion.

Apple growing 54% YoY at $90B scale. My brain: pic.twitter.com/sgznAJZgJ8

— Aaron Levie (@levie) April 28, 2021

https://platform.twitter.com/widgets.js

Furthermore, Apple recorded earnings per share (EPS) of US$1.40. This amounts to US$23.63 billion in net income, compared to US$11.25 billion for the same time last year. 

Apple share buyback of $90 billion

The company also announced its plan to buy back US$90 billion worth of Apple shares. This is despite the Apple share price being near record highs.

In a bullish sign, this buyback program is significantly larger than the US$50 billion carried out last year, and the US$75 billion in 2019.

In addition to the buyback, Apple also declared a cash dividend of US22 cents per share. Shareholders will be pleased, with this being 7% higher than last year.

Foolish takeaway

It is hard to believe a company doing nearly US$300 billion a year in revenue is still growing at over 50% YoY. Growth at scale is one of the most difficult challenges to overcome in business. Yet, Apple continues to deliver and expand upon its product offerings.

The Apple share price has delivered a return of 85% in the past year. The company will need to navigate silicone shortages and continue to invent quality products to break the $3 trillion barrier.

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Mitchell Lawler owns shares of Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple and recommends the following options: short March 2023 $130 calls on Apple and long March 2023 $120 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Australian Strategic Materials Ltd (ASX: ASM) share price has nudged 1% higher on Thursday after announcing its March quarter activities report. 

Australian Strategic Materials is an integrated materials business and emerging ‘mine to manufacturer’ producer of critical metals. The company owns the Dubbo project in NSW, a proven long-term resource of rare earths.

Currently, the company is developing its metallisation plant in South Korea to produce a range of high-purity metals and alloys. 

At the time of writing, the share price has retreated slightly to $4.82, up 0.84%. 

What’s driving the Australian Strategic Materials share price?

Australian Strategic Materials has continued to progress its key Korean Metals Plant following the signing of a Memorandum of Understanding (MoU) with local provincial and city government bodies. 

The Korean Metals Plan will produce and supply titanium and key rare earth metal alloys to the South Korean market. This comes as part of a broader global move away from China as a key rare earths supplier.

The company’s board has approved the progression of the plant with the initial phase estimated to cost US$9.9 million. Small scale production of metals is expected to commence in the second half of calendar year 2021. The targeted project of titanium powder and rare earths is expected to ramp. This will take production up from 582 tonnes in 2021 to 4,282 tonnes in 2022. 

Current designs for the plant includes planned production levels of 5,200 tonnes per annum. The second phase of capital expenditure will see the installation of a second titanium line. There will also be additional neodymium lines upon the execution of offtake agreements within the South Korean manufacturing sector. 

The Dubbo project

The Dubbo project is ready for construction. All major state and federal approvals and licences in place, alongside a proven process flow sheet and solid project economics. The company is working through an optimisation study, undertaking engineering and test work during the March quarter. The optimisation study is expected to be completed in 3Q21. This will allow time for re-scoping and potential discussions with South Korean parties interested in participating in its build, own, and operate model. 

With everything coming together, the company is also focused on the delivery of metal offtake agreements with titanium consumers and magnet producers in South Korea. Discussions continue to take place with various parties to address the supply of these materials.

Furthermore, the materials are considered critical to the country’s manufacturing sector. The company is progressing discussions with both Korean and global suppliers with the focus on securing binding and committed agreements. 

Why has the share price underperformed in 2021? 

Despite the positive operational progress from the company, the Australian Strategic Materials share price has slumped 25% year-to-date. With that said, the company made its ASX debut on 30 July 2020, where it has run up more than 250% since. 

Recent share price dragging factors could include its $91 million capital raising at a price of $4.80 per share as well as a sharp sell-off from rare earth producer, Lynas Rare Earths Ltd (ASX: LYC). 

More reading

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• Why some of your favourite ASX growth shares are free-falling this week
• How the Lynas share price (ASX:LYC) sunk 90% last time this happened 
• Why is the Lynas (ASX:LYC) share price down 14% this week?
• ASX 200 drops, Challenger plummets, Lynas falls

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The embattled St Barbara Ltd (ASX: SBM) share price is catching a break after Citigroup upgraded the gold miner following its devastating sell-off yesterday.

The St Barbara share price jumped 2.7% to $1.92 in early trade when the S&P/ASX 200 Index (Index:^AXJO) advanced 0.2%.

The bounce isn’t enough for St Barbara to reclaim most Wednesday’s losses due to a soft production report.

St Barbara share price tumbling into the “buy” zone

But the dip is a buying opportunity for those with a stronger stomach, according to Citi.

“On a risk-reward basis SBM now looks attractive following yesterday’s 8% selloff—for those willing to look through a likely narrow FY21e production miss and the reality that mining at depth at Gwalia comes with unique operational challenges,” said the broker.

“SBM is now trading on a P/NAV of 0.9x even with a 40% risk-weighting at Simberi and we view the outlook for Gwalia, Australia’s deepest trucking mine, as improving.”

Weak quarter production update

The miner’s March quarter gold output of 82,300 ounces fell short of Citi’s estimates by 19%. Adding insult to injury, all-in sustaining costs (AISC) of A$1649/oz was 17% higher.

Little wonder why the St Barbara share price tanked yesterday!

Gold production from its Gwalia mine was steady in the quarter at 42,700 ounces, which wouldn’t be so bad if the broker hadn’t pencilled in a 10% increase.

“Covid impacts saw Simberi burn cash as production fell to a 5yr low of 19koz with ASIC lifting to an eye-watering A$2426/oz,” added Citi.

“Atlantic also delivered below expectations (-24% Citi/consensus) with 20.6koz Au @ A$1128/oz (+9% vs CitiE).”

Full year guidance at lower end of range

At least management didn’t downgrade its full year production guidance, although it did warn that it would come in at the bottom of its 370,000 to 410,000 ounces forecast.

Meanwhile, the miner changed its ASIC estimate to between $1,440 and $1,520 an ounce for the year. This compares to its previous guidance of $1,360 to $1,510 an ounce.

What is the St Barbara share price worth?

But it looks like the bad news is more than baked into the St Barbara share price. Citi upgraded the shares to “buy” from “neutral” but slapped a “high risk” warning on its bullish call.

The broker also increased its price target on St Barbara by 10 cents to $2.40 a share.

Gold miners haven’t been performing well over the past year as the gold price eased from record highs at over US$2,000 an ounce.

But St Barabra is lagging many of its peers with a loss of around 22%. In contrast, the Evolution Mining Ltd (ASX: EVN) share price and Newcrest Mining Ltd (ASX: NCM) share price have shed 13% and 5%, respectively.

More reading

• Why the Newcrest Mining (ASX:NCM) share price is on watch
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises, Kogan jumps, gold miners sold off
• Downer (ASX:DOW) share price may only be at start of a capital return cycle
• The ASX 200 just had its slowest quarter in 12 months

Motley Fool contributor Brendon Lau owns shares of Evolution Mining Limited, Newcrest Mining Limited and St Barbara Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The LiveTiles Ltd (ASX: LVT) share price is crashing lower on Thursday morning.

In early trade, the employee experience software provider’s shares are down 12.5% to a multi-year low of 17.5 cents.

This latest decline means the LiveTiles share price is now down 44% from its 52-week high or ~75% from its record high.

Why is the LiveTiles share price crashing lower?

Investors have been heading to the exits today following the release of LiveTiles’ third quarter update.

According to the release, at the end of the third quarter, LiveTiles’ annualised recurring revenue (ARR) reached $58.9 million on a reported basis. This was up 7% on the prior corresponding period and just 1.4% since the end of December.

Management blamed much of this weakness on currency headwinds, noting that its growth would have been much stronger had the Australian dollar not strengthened.

However, also weighing on its performance and the LiveTiles share price, was a net reduction in customers.

At the end of March, customer numbers stood at 1,114. This is down by 18 customers since the end of December.

Cash burn continues

Also putting pressure on the LiveTiles share price has been its cash burn and cash receipts.

Although the company reported a 12% year on year increase in cash receipts to $12.2 million, they were down 6% on the prior quarter.

This led to the company recording a net cash outflow from operating activities of $2.3 million, which reduced its cash balance to $16.75 million.

Management commentary

While the market may have reacted negatively to the update, one person that was happy with it was LiveTiles’ Co-Founder and Chief Executive Officer, Karl Redenbach.

He said: ”We are very pleased again with our overall Q3 results, in what continues to be a challenging operating macro environment across the globe, achieving continued growth in our ARR results, reducing our net cash outflows and maintaining a healthy cash position.”

“We’re confident LiveTiles products will continue to gain traction and our growth will continue to accelerate with it,” he added.

More reading

• Why this top broker just upgraded the battered St Barbara (ASX:SBM) share price to “buy”
• Why the Rhipe (ASX:RHP) share price is racing 5% higher today
• Netflix’s downbeat earnings explained
• Why the Nitro (ASX:NTO) share price is surging 6% higher today
• Woolworths (ASX:WOW) share price lower on third quarter sales update

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of LIVETILES FPO. The Motley Fool Australia has recommended LIVETILES FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Rhipe Ltd (ASX: RHP) share price is racing higher after the company provided investors with a trading update.

At the time of writing, the cloud and software solutions provider’s shares are fetching for $1.82, up 5.8%.

Let’s take a closer look at how Rhipe performed for the period.

Q3 YTD financial performance

Investors appear pleased with the company’s financial update, sending Rhipe shares higher in early morning trade.

For the 9 months ending March 31 (Q3 YTD FY21), Rhipe reported unaudited sales of $273.1 million. This represents a 15% lift from the $236.5 million attained over the prior corresponding period.

Revenue soared to $46.8 million, up 15% when compared against Q3 YTD FY20. Rhipe noted that the continued momentum in Microsoft public cloud products, which includes Office 365 and Azure, drove the result. In total, over 775,000 Microsoft Office 365 licensees were recorded, adding around 16,000 seats per month.

In addition, the company’s services and solutions business also accomplished strong growth.

As a result, gross profit rose to $43.1 million, reflecting a gain of 13% compared to this time last year.

Operating expenses moved slightly higher to $30.1 million, a 5% increase over the prior comparable period. Rhipe stated that higher investment efforts in Q3 are likely to flow into the next quarter.

Group operating profit (gross profit minus operating expenses) came to $13.2 million, up 36% on Q3 YTD FY20. The robust performance was attributed to solid revenue growth with careful cost management by the group.

Rhipe provided an acquisition update saying that cyber security distributor, emt Distribution, is expected to be completed by 30 April 2021. Once the business is integrated into Rhipe’s ecosystem, new opportunities are anticipated to arise from both existing and new clients.

Looking ahead, Rhipe projects full-year operating profit (ending 30 June 2021) to be above $18 million. This is ahead of the previously forecasted guidance of $17.5 million indicated to investors.

Rhipe share price review

The Rhipe share price has moved in circles over the past 12 months, currently sitting in the mid-point of its 52-week range. The company’s shares reached a high of $2.35 in June 2020, before hitting a low of $1.545 last month.

Based on today’s share price, Rhipe has a market capitalisation of around $277 million, with 161 million shares on issue.

More reading

• The ASX shares brokers think you should be watching
• Why AMP, Boral, Rhipe, & Zoono shares are pushing higher
• Rhipe (ASX:RHP) share price rises on cyber security acquisition

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Microsoft. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Netflix (NASDAQ: NFLX) share prices fell roughly 10% after the company reported first-quarter earnings last week. The global streaming content provider reported revenue in line with expectations and earnings per share above what analysts on Wall Street were predicting.

So why did shares of Netflix fall 10% after the results were made public? 

Slowing subscriber additions

One obvious reason for the drop was Netflix had guided investors that it would add 6 million new subscribers in the quarter. When it was all said and done, it only added 4 million. Subscribers are what fuel Netflix’s business. Almost all of the company’s $7.16 billion in revenue last quarter came from subscriptions.

To make matters worse, Netflix is forecasting it will add only 1 million new members in the second quarter. If it happens as forecast, that will be the lowest quarterly gain since 2016. Management explains that the reason for the slowdown in member growth is the significant pace of signups during 2020. As people anticipated being cooped up in their homes during the pandemic, they signed on to Netflix by the millions.

Management does make a valid point — 36 million people signed up for Netflix in 2020. Still, it wasn’t enough to assuage worried investors.

There is also worry that increasing competition in the streaming wars might make it difficult for Netflix to continue growing. Walt Disney‘s (NYSE: DIS) streaming services are mounting a formidable challenge with over 150 million subscribers across its three main services (Disney+, Hulu, ESPN+).

There has always been volatility in membership growth for Netflix. What’s changed over the last few quarters are the significant challenges posed by competitors. Whereas previously investors may have attributed lower subscriber growth at Netflix to variance, they may now attribute a slowdown to competition.  

What it could mean for investors 

Given the heightened importance of competition, shareholders should expect higher volatility in the stock price following these quarterly announcements of membership totals. If you’re a long-term believer in Netflix, that can work to your advantage. While volatility is generally associated with risk, stocks with higher risk can produce higher returns than a lower-risk counterpart. Besides, Netflix is also reporting lower subscriber churn and it continues to prove itself as a content producer. The seven Oscars it won this year were the most among all the film studios. Competition might slow it down, but it’s not going out of business anytime soon. 

That volatility can also create share price pullbacks that can be a buying opportunity for those with a long-term mindset and willingness to withstand so fluctuation along the way. Despite the recent slowdown in subscriber growth, Netflix is hitting a stride in performance. Overall revenue is nearly triple what it was in 2016. And earnings per share are up an incredible 14 times what they were in 2016.

Moreover, even though you would be getting a business that’s in much better shape, you can now buy Netflix at a forward price-to-earnings ratio near the same level it was before the onset of the pandemic (47.8). 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

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• Broker weighs in on the Redbubble (ASX:RBL) share price after its 20% dive
• Are Netflix’s woes a warning for ASX tech shares?

Parkev Tatevosian owns shares of Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix and Walt Disney. The Motley Fool Australia has recommended Netflix and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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In morning trade, the Nitro Software Ltd (ASX: NTO) share price is surging higher.

At the time of writing, the global document productivity software company’s shares are up over 6% to $3.14.

Why is the Nitro share price surging higher?

This morning Nitro released its first quarter update. As you might have guessed from the Nitro share price performance, it was strong performer during the quarter, reporting growth across all key metrics.

At the end of the quarter, the company’s annual recurring revenue (ARR) was 66% higher than the same time last year.

And while it hasn’t provided the actual ARR figure, this growth rate is well ahead of what is required to achieve its FY 2021 ARR guidance. That guidance is for ARR of between $39 million and $42 million, which represents year on year growth of 41% to 52%.

Another positive is the ongoing transition to a software-as-a-service model. At the end of the quarter, subscription revenue accounted for 61% of total revenue. This is up from 53% during FY 2020.

Also growing strongly were its cash receipts from customers, which grew 31% over the prior corresponding period to $12 million.

This strong growth was driven by increased usage and a number of key customer wins and expansions. The latter includes BNY Mellon, Howden Group Holdings, Mace Group, Petrofac, Continental AG, and Jeff Bezos’s Blue Origin.

And although it posted a net cash outflow from operations of $1.5 million, it remains in a very strong financial position to pursue growth opportunities. At the end of the period, Nitro’s cash balance stood at $41.8 million.

“The accelerating multi-year shift to a digital workplace”

Also giving the Nitro share price a boost was commentary from Nitro’s Co-Founder and Chief Executive Officer, Sam Chandler.

Mr Chandler spoke positively about the quarter, the remainder of FY 2021, and its long term opportunity.

He said: “The accelerating sales momentum we demonstrated at the end of FY20 has continued into the current year, with the strategic investments we made in our people, product suite and sales strategy across the past 12 months positioning us well to ride the global work-from-anywhere tailwinds.”

“As the world continues to manage the fall-out from the COVID-19 pandemic, digital-first and digital-only workflows are becoming increasingly entrenched. Throughout FY20, we laid the foundations to lead in this new environment by strengthening our leadership team, sharpening our go-to-market strategy to win and retain customers, and developing our document productivity platform, with the launch of Nitro Sign.”

“The results of this investment are demonstrated by our strong performance in the first quarter, which shows continued growth in ARR and subscription revenue. With a solid balance sheet and a scalable platform for growth, we are confident we can take advantage of the accelerating multi-year shift to a digital workplace to build a truly sizable and substantial enterprise software company.”

Outlook

Nitro has reaffirmed its guidance for FY 2021.

It continues to target ARR between $39 million and $42 million, revenue between $45 million and $49 million, and an operating EBITDA loss between $11 million and $13 million.

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• 2 small cap ASX tech shares to buy now
• ASX stock of the day: Nitro Software (ASX:NTO) shares rocket 11%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Nitro (ASX:NTO) share price is surging 6% higher today appeared first on The Motley Fool Australia.

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