The Updater Inc (ASX: UPD) share price went up by 15% after releasing its report.
Updater is a technology company that helps people transfer their utilities, forward mail and update accounts when they move.
Here are some of the highlights compared to last year:
- Revenue increased by 287% to US$2.2 million
- Loss worsened by 54% to US$13.68 million
- Cash on the balance sheet increased to US$49.67 million
- Fourth quarter cash receipts of US$1.69 million
Updater re-iterated that although revenue increased from US$578,258 last year to US$2,235,405 this year, revenue growth was not its main target. Its goal was to increase its estimated market penetration. It started selling business products in the fourth quarter of 2017, which included insurance and full-service moving.
Management said that the company surpassed more than 15% of all US household moves in the third quarter of 2017, which was five months ahead of schedule. The company said that its estimated market penetration in the first quarter of 2017 was 9.04%, in the second quarter it was 11.68%, in the third quarter it was 16.59% and in the fourth quarter it was 18.03%.
The company is still aiming to achieve 35% market penetration and it believes that this will solidify its long-term defensible position if achieved.
During the 2017 year the company processed a total of 2,363,048 moves, which was a 267% increase compared to last year.
The company's new insurance division has secured licences to distribute property and casualty insurance in 46 US states in 2017. The company will also be selling pay TV and internet packages as part of its offering to people as well.
Updater believes that based on the reaction to its business products, it anticipates a lot of growth in the upcoming year. The company is forecasting revenue of between US$19 million to US$23 million for 2018.
Foolish takeaway
This seemed like a very pleasing report and it's good to see Updater is making progress on all of its aims. The increase of revenue will be the key for the future of the business, hopefully it is able to grow revenue beyond US$23 million in the next couple of years.
The only doubt I have about Updater is its current valuation, it's hard to value a company which has very little revenue now but could have bigger revenue in the medium-term.
