The Hansen Technologies Ltd (ASX: HSN) share price has jumped more than 11% after giving a pleasing profit update.
Hansen say it’s a leading global provider of software and services to the energy & utilities and communications & media industries. The company helps customers create, sell and deliver new products and services, manage and analyse customer data, and control critical revenue management and customer support processes. It has customers in more than 80 countries.
Strong FY25 update
The company increased its guidance for underlying EBITDA and cash EBITDA, thanks to “improved operating efficiencies, disciplined cost management, and a positive earnings contribution from powercloud, which returned to profitability ahead of expectations” compared to the time of acquisition.
Previously, operating revenue was guided to be between $398 million to $405 million for FY25, but this has been reduced to a range of $391 million to $393 million.
However, underlying EBITDA is now expected to be between $110 million to $112 million for FY25, up from the previous guidance of $92 million to $101 million. The underlying EBITDA margin is now anticipated to be approximately 28%.
FY25 cash EBITDA is now guided to be between $92 million to $94 million, up from between $76 million to $85 million. The cash EBITDA margin is predicted to be 24%.
The underlying and cash EBITDA are both expected to be up approximately 20% in dollar terms in FY25 compared to FY24, which are strong supports for the Hansen share price.
What happened to the revenue?
Increased profitability is the most desired outcome, but why did the revenue guidance decline?
The company said that industry tailwinds from both Hansen verticals are driving increased demand for the group’s products and services globally.
However, due to “project timing and customer-driven factors, some revenue will shift to FY26”.
But, FY25 is still expected to see solid operating revenue growth of approximately 11% and growth of approximately 5% excluding the impact of the powercloud acquisition.
Hansen said it has a solid pipeline of committed business and remains optimistic about its growth potential beyond FY25.
Final thoughts on the Hansen share price
The company continues to win new contracts and has proven that its profitability has increased on the revenue it’s generating. While the revenue guidance is lower, the revenue has only been delayed, which could mean stronger FY26 financials than expected.
The Hansen share price has already jumped, so I wouldn’t say it’s cheap at the current valuation, but, I think the outlook is very promising for the business.
There are also other ASX growth shares I’d want to take a look for their potential.
