The Nexion Group (ASX: NNG) share price has been on fire since hitting the ASX boards last week.
In afternoon trade the shares of the leading hybrid cloud, network, security and data centre company are up a massive 36% to 38 cents.
This means the Nexion share price is up 90% since its IPO last week.
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The Nexion IPO
Nexion commenced trading on the Australian share market last Thursday after raising $8 million via the issue of 40 million shares at $0.20 per share.
This gave the company a market capitalisation of $25.4 million at the time of listing. This has now increased to just under $50 million following today's gain.
Among its major shareholders are co-founder and CEO Paul Glass and fellow co-founder and COO Kevin Read. They collectively own 21.4% of its shares outstanding. Including the rest of its management and board, a total of 28.7% of its shares are in the hands of insiders.
The company believes this provides a high degree of alignment with investors.
What does Nexion do?
Nexion offers private cloud infrastructure coupled with public cloud products such as Amazon AWS and Microsoft Azure to create a hybrid cloud service called OneCloud.
It uses software-defined wide-area network (SD-WAN) technology to connect its corporate customers to its OneCloud Nodes.
OneCloud Nodes consist of compute and storage capacity, bonded globally via SD-WAN that customers rent to deploy their corporate applications and integrate their operations into public cloud services offered by the likes of Microsoft, Amazon and Google.
The company currently operates in Perth, Adelaide, and Melbourne. However, it is aiming to become a global operator of Hybrid Cloud SD-WAN infrastructure. Capital from the IPO will be used to fund its expansion.
This will include a staged expansion into New Zealand, Canada, and Africa.
Financials
In FY 2020 the company's revenue almost doubled year-on-year to $4.5 million. It also achieved EBITDA profitability in FY 2020 after the business demonstrated outstanding scalability with operating costs increasing only 14%.
Management believes the outlook for Nexion is favourable and should support strong growth in revenue and EBITDA over the medium to long term time.
Mr Glass commented: "We are extremely pleased by the level of support from investors and the success of the IPO is testament to the market's enthusiasm for our business. On behalf of the Board, I would like to welcome our new shareholders to the Company."
"Since we founded the Company in 2017, NEXION has demonstrated outstanding growth in our initial target market of Australia, but we believe that the best is yet to come. The capital raised will allow us to expand the business in a staged approach beyond its existing domestic footprint and into global markets. Our strategic relationship with Aryaka is instrumental to our global ambitions."
"NEXION is a business with strong revenue growth potential, a high level of recurring revenue, excellent scalability and a vast market opportunity driven by an irreversible trend towards pays-as-you-go IT platforms. I look forward to reporting on the continued success of the Company," he concluded.
