PayGroup (ASX:PYG) share price wobbling on half year revenue surge

Shares are struggling despite a big lift in revenues.

| More on:

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 PayGroup Ltd (ASX: PYG) share price was well into the green in early morning trade, up 2.2%. It's since given up those gains and is currently down 2.2%

PayGroup shares may be getting impacted by the wider Omicron variant led market selloff, which is seeing the All Ordinaries Index (ASX: XAO) down 0.6% at time of writing.

Below, we take a look at the Software as a Service (SaaS) company's half year results for the 6 months ended 30 September (1HFY22).

A piggy bank balances on a ribbon, indicating a wobbly share price

Image source: Getty Images

What half year results were reported?

The PayGroup share price is wobbling despite the company reporting an 83% increase in statutory revenue of $12.8 million.

New contracts signed reached a record $9.6 million, up 78% on the prior corresponding period.

Normalised earnings before interest, taxes, depreciation and amortisation (EBITDA) of $1.5 million, excluding one-off expenses and acquisition costs, slipped from $1.8 million in 1HFY21. PayGroup said that this figure incorporates continued investment in its platform capabilities for future growth.

The company said that it is currently servicing more than 2,500 enterprise customers.

Commenting on the half year results, PayGroup's managing director Mark Samlal said:

Our strong operational performance and continued investment in our platform underpins our ability to scale the payroll business, expand margins and execute on key monetisation opportunities going forward.

We have made significant progress to date and are excited by the organic opportunities in FY22 and beyond. This is reflected in the growth of our current pipeline, which is 6 times larger than 12 months ago. We are highly confident that we have the right foundations in place and remain focused on delivering on key organic opportunities to drive sustainable long-term growth.

Samlal also reaffirmed the company's guidance. "We have affirmed FY22 ARR [annual recurring revenue] guidance of at least $37 million and provided FY22 statutory revenue guidance of $26 million, which represents more than 95% of the exit ARR announced at FY21," he said.

PayGroup share price snapshot

The PayGroup share price has struggled in 2021, down 28%. That compares to 10% year-to-date gain posted by the All Ords.

Over the past month, PayGroup shares are down 16%.

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

More on Technology Shares

Two businessmen shake hands against a tech backdrop, indicating a company IPO or a merger between two technology stocks.
Technology Shares

2 ASX ETFs that could be a perfect for a tech rally

These two funds could harness a tech rally.

Read more »

An investor looks happy holding a finger to his computer screen while holding a coffee cup in a home office scenario.
Technology Shares

NextDC reports 60% increase in contracted utilisation growth and higher capex guidance

NextDC’s contracted utilisation and future pipeline surged with higher FY26 capex guidance, supported by strong new customer wins.

Read more »

woman sitting at desk holding hand up in stop motion
Technology Shares

NextDC enters trading halt ahead of entitlement offer announcement

NextDC shares enter trading halt as the company prepares to announce an equity raise via an entitlement offer.

Read more »

A man with a beard and wearing dark sunglasses and a beanie head covering raises a fist in happy celebration as he sits at is computer in a home environment.
Share Market News

ASX 200 tech shares rocket 13% as long-awaited sector rebound accelerates

A strong technology sector turnaround in the Australian and US markets began on 31 March.

Read more »

A surprised man sits at his desk in his study staring at his computer screen with his hands up.
Technology Shares

Which ASX 200 tech stock has Bell Potter just downgraded?

The broker thinks its shares are fairly valued now after rebounding strongly.

Read more »

Hologram of a man next to a human robot, symbolising artificial intelligence.
Technology Shares

The tech rally is back: here are 5 ASX shares leading the charge

The rally’s staying power hinges on earnings and market conditions.

Read more »

Woman on her phone with diagrams of tech sector related elements linking with each other.
Technology Shares

Why I think these ASX tech stocks are strong buys

As AI concerns ripple through the market, some ASX tech companies may be better positioned than they first appear.

Read more »

Two IT professionals walk along a wall of mainframes in a data centre discussing various things
Technology Shares

Shares in this $1.4 billion ASX data centre company could jump by 72% Citi says

Strong demand has the potential to boost these shares higher.

Read more »