(Sharecast News) - Mobile worker software specialist Checkit reported a 16% increase in annual recurring revenue in a trading update on Thursday, to £13.3m for the financial year just ended, meeting expectations.
The AIM-traded firm said the growth was underpinned by a 17% rise in recurring revenue to £11.2m, and an 18% increase in non-recurring revenue to £0.8m, resulting in total group revenue of £12m for the 12 months ended 31 January, up by 17% from the prior year.
Despite challenges posed by the global economy, Checkit said its revenue growth aligned with market expectations.
It attributed the success to its 'land and expand' strategy, focusing on upselling and cross-selling to existing customers while identifying new opportunities for expansion both geographically and vertically.
With recurring revenue now comprising 93% of the total and boasting a high net revenue retention rate of 111%, Checkit said it had a solid foundation as it continued its pursuit of profitability.
Additionally, its emphasis on gross margin expansion yielded positive results.
Anticipated losses, represented by adjusted LBITDA, were expected to nearly halve to £3.4m for 2024, compared to £6.4m in 2023.
Operational efficiencies and prudent cost management were said to have been instrumental in the improvement.
Checkit said its cash position at the year-end stood at £9m, reflecting a 46% reduction in LBITDA and strategic inventory purchases to mitigate supply chain constraints.
The company anticipated that position to normalise over the next 12 to 18 months, supporting further revenue growth.
In terms of product development, Checkit leveraged data and incorporated new AI and machine learning tools to enhance its offerings.
The board said the introduction of functionalities supporting sustainability initiatives and predictive maintenance of assets had been well-received, with active trials underway with major customers.
Those developments were expected to bring significant value to both the company and its clients.
Geographically, Checkit said 26% of annual recurring revenue was now generated in the United States.
Additionally, the company said it was expanding its market reach into sectors such as food manufacturing and research and development laboratories, further diversifying its revenue streams.
"The second half of the year has seen further progress on our stated strategy and our drive towards profitability," said chief executive officer Kit Kyte.
"Our new AI-enhanced products are, we believe, best in class and a step change ahead of what's currently available in the market.
"We will continue to focus on driving top-line growth in the business and look forward to the 2025 financial year with confidence."
Checkit said it would announce its results for the financial year ended 31 January in April.
At 1303 GMT, shares in Checkit were down 5.33% at 21.3p.
Reporting by Josh White for Sharecast.com.
Checkit (CKT)