Yesterday after the ASX closed for trading, small-cap sports technology company Catapult Group International (ASX: CAT) released its half-year results, along with an accompanying 20-min recorded presentation (see below) via YouTube.
Catapult’s headline figures
During the half year, revenue fell by 4.1% to US$33.3 million – primarily due to lower capital sales and a fall in content licensing due to COVID. Looking at the various product lines:
- Wearables revenue grew by 7.4% to US$17.5 million
- Video analytics revenue dropped by 15.2% to US$13.9 million
- Performance & Health subscription revenue increased by 14%
Catapult’s net loss expanded by 39.2% to -US$4.5 million, driven by a step-up in fixed costs as the company invested more heavily in the infrastructure and resources necessary to scale. However, the business remains free cash flow positive, generating around US$8 million of free cash during the half and pushing the balance sheet to US$24.6 million in cash and no debt.
R&D investment remained around ~10% of revenue as Catapult rolled out 24 new customer-facing solutions during the period.
Operating metrics
Annualised contract value or ACV grew by 8.3% to US$44.5 million, this reflects the value of all recurring revenue on a yearly basis. As management transition to more subscriptions, this is a focus metric for investors.
ACV churn, which gives us an indication of future revenue lost when customers leave, reduced to a historical low of 4.5% – an impressive feat given the COVID environment.
Customers with two or more solutions grew by 19% to 241 customers – demonstrating the cross-sell opportunities in Catapult’s business model. Contribution margin increased from 46% to 50% as efficiency rose.
Finally, Catapult reported having 3,158 teams/customers. The company lost around 240 customers between June and Sep 2020, but said it then recaptured two-thirds of them in the fourth quarter as conditions improved.
Catapult is a interesting ASX growth share and business worth keeping tabs on. Competitors include STATsports out of Europe. On the ASX, other ASX globally-focused technology companies include Altium Ltd (ASX: ALU), WiseTech Ltd (ASX: WTC) and Appen Ltd (ASX: APX).
