The Envirosuite Ltd (ASX: EVS) share price is trading flat today after the company posted its FY20 results. The share price is trading at 16 cents at the time of writing, after reaching as high as 17 cents in morning trade. Envirosuite is an environmental management technology company that helps customers with compliance around environmental management. Many client companies extend their business relationship, however, because the Software-as-a-Service platform enables them to unlock value beyond compliance monitoring.
Envirosuite FY 2020 results
The Envirosuite share price tumbled 27% from its early highs in FY20. Despite this, the company achieved a number of business objectives in FY20.
Envirosuite posted $24 million of revenue of which 75% is recurring. This is an increase of 210% in the company's revenue. However, the cost of revenue grew an even greater amount, increasing by 229%. This lead to an $18 million operating loss for the company.
It's not necessarily bad news as the operating loss was a result of the company establishing operations with China, a huge potential market for Envirosuite. The loss was also driven by increased investment in people and operation and integration costs of EMS business. As a result, the company announced negative adjusted EBITDA of $12 million.
However, the SaaS company said it would remove $8 million in costs due to duplicate and redundant roles. An additional $3 million will be cut as a result of operational synergies. The cuts are expected to be made in early FY21.
The company has $24.4 million in cash and cash equivalents. However, $4.2 million is earmarked for the remaining settlement for EMS and another $1.3 million for the AqMB acquisition.
Outlook for the Envirosuite share price
Looking ahead, Envirosuite shareholders have plenty to be excited about. The company has a 3-stage expansion plan with a target of $100 million in revenue by June 2023. Envirosuite is currently achieving annual recurring revenue of $43 million.
While the company has not disclosed a revenue target for FY21, it expects to be EBITDA-positive by March next year.
