ELMO (ASX:ELO) share price on watch after full-year result

Why the Aussie tech share will be in focus on Monday morning.

| More on:
a surprised investor reading about an asx share price in a newspaper

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The ELMO Software Ltd (ASX: ELO) share price is one to watch on Monday morning after the Aussie software group reported its financial year 2021 (FY2021) earnings to the market.

ELMO share price in focus as revenue guidance achieved

The cloud-based human resources and payroll software company reported its FY2021 results highlighted by the following:

  • Annualised recurring revenue (ARR) of $83.8 million, up 52.1% on FY2020 figures. Organic growth of 26.0% in mid-market and small business operations, as well as recent acquisitions, helped deliver this result.
  • Full-year revenue climbed to $69.1 million, up 37.9% on FY2020 figures.
  • Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $0.4 million compared to a $2.9 million loss in FY2020.
  • Gross profit of $59.9 million compared to $42.8 million in FY2020.

ELMO previously provided FY21 guidance of $83 million to $85 million ARR and revenue expectations of $68 million to $70 million. Based on the above, today's results were largely in the mid-range of guidance, making the ELMO share price one to watch this morning.

What happened in FY21 for ELMO?

The ELMO share price has been under pressure in FY21. Shares in the Aussie software group are down 10.9% in the last 12 months. A capital raising and FY20 revenue at the lower end of guidance both put pressure on the Aussie tech share.

ELMO continued to roll out new modules and technology offerings throughout the year. These included the launch of its Predictive People Analytics module, predicting the "flight risk" of high performers, and its ELMO Experiences module subsequent to year-end.

What did management say?

ELMO CEO and co-founder Danny Lessem commented on the company's performance:

We saw strong growth returning throughout 2H FY21 from the mid-market segment and growth accelerating in the Breathe (small business) segment.

Returning business confidence and the increase in remote based working is driving the adoption of cloud-based business tools including HR technology. FY22 is shaping up to be a good year for ELMO, across both mid-market and small business segments.

We anticipate strong growth in FY22 and expect to surpass $100 million in ARR, an exciting milestone.

What's next for ELMO?

According to the company's results release, ELMO is looking to expand its footprint in the UK by leveraging the recent Webexpenses acquisition to launch ELMO in that market.

ELMO's FY2022 guidance includes group ARR of $105 million to $111 million with revenue of $90.5 million to $95.5 million. Group EBITDA is projected to climb to $1 million – $6 million this financial year.

The ELMO share price has been under pressure for the last 18 months or so. The Aussie tech share will be in focus following this morning's results announcement after the company hit its ARR and revenue guidance.

Should you invest $1,000 in Elmo Software right now?

Before you buy Elmo Software shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Elmo Software wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Elmo Software. The Motley Fool Australia owns shares of and has recommended Elmo Software. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Earnings Results

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Technology Shares

Guess which ASX 200 tech stock is crashing 14% on results day

This tech stock is having a rough time today. But why?

Read more »

Worried woman calculating domestic bills.
Earnings Results

ANZ share price falls on half-year results

How did the bank perform during the first half? Let's find out.

Read more »

Man looking happy and excited as he looks at his mobile phone.
Bank Shares

NAB share price jumps on solid half year results

Investors have responded positively to the bank's results.

Read more »

Lines of codes and graphs in the background with woman looking at laptop trying to understand the data.
Earnings Results

Westpac share price sinks on half-year results miss

Let's see how the big four bank performed during the first half.

Read more »

Miner looking at a tablet.
Gold

Newmont share price lifts off on first-quarter results

The ASX 200 gold stock is charging higher on Thursday.

Read more »

A man wakes up happy with a smile on his face and arms outstretched.
Healthcare Shares

ResMed shares jump 8% on strong Q3 update

It was yet another strong quarter from this high-quality company.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Financial Shares

Up 53% in a year, why is this ASX 200 financial stock leaping higher again today?

Investors are sending the ASX 200 financial stock soaring on Wednesday. Let’s see why.

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Why is this ASX 200 uranium stock rocketing 17% on Wednesday?

The ASX 200 uranium stock is racing higher today. But why?

Read more »