ASX software-as-a-service (SaaS) shares proved their worth last year. The business model focused on sticky recurring revenues that brought home the cheese for some Aussie-listed companies in 2021.
Interestingly, often SaaS shares slot into the information technology sector. This is a sector that severely underperformed the S&P/ASX 200 Index (ASX: XJO) in 2021, with tech sliding 2.8% while the broader market rallied 13%. Yet, a number of SaaS companies racked up market-beating returns for their shareholders.
Let's take a look.
ASX SaaS shares giving investors the juiciest rewards last year
Imdex Limited (ASX: IMD)
Shares in ASX-listed Imdex hit a home run last year, with the share price rallying 71% during the year.
The mining equipment and technology company attracted the market's attention with a solid FY21 result. Impressively, the $1.12 billion company increased its revenue by 11.2% to $264.4 million year on year. Additionally, net profits surged 45% to $31.67 million.
While a substantial portion of the company's revenue is comprised of once-off sales and equipment rentals, there is a growing portion of SaaS-based revenue. Between FY17 to FY21, rental and SaaS revenue has increased from 44% to 57% of total revenue.
Readytech Holdings Ltd (ASX: RDY)
Entering the arena of the five best ASX SaaS shares of 2021 is ReadyTech Holdings. This company provides cloud-based software to the education, employment, and government sectors. For shareholders, ReadyTech also provided sizeable returns last year — rising 87% in the 12-month timeframe.
According to its FY21 full year presentation, the education software provider achieved respectable growth during the financial year. For instance, revenue increased 27.4% to $50 million compared to the previous year.
Although, earnings decreased to $2.16 million from $3.94 million. However, it's worth noting ReadyTech acquired Open Office for an upfront price of $54 million during this time.
WiseTech Global Ltd (ASX: WTC)
Making the podium finish is cloud-based logistics software provider, WiseTech Global. In 2021, the company dished out a 90% gain to investors.
WiseTech continued to grow its top line during 2021, a year plagued by supply chain and logistics issues. Perhaps this enabled a more robust trading period for the ASX SaaS share. In FY21, revenue increased 18% to $507 million compared to the prior corresponding period.
Additionally, the sticky nature of the company's software was reflected in its percentage of recurring revenue, at nearly 96%.
Janison Education Group Ltd (ASX: JAN)
Breaking into the 100%-plus return club last year and finding itself as the second best-performing ASX SaaS share is Janison Education. The online school assessments provider experienced a 130% rise in its share price in 2021 — a 10 times better return than the benchmark index.
For those unaware, Janison offers assessment platforms to a wide array of customers including the New South Wales government, NAPLAN, Chartered Accountants, and the University of London — to name a few. It appears shareholders weren't too concerned about the widening losses in FY21. Notably, the company grew revenue by 38% to $30.2 million.
Janison has $80 million to $100 million in revenue on its radar through growing its customer contracts and consolidating the digital assessments industry with its acquisition strategy.
Life360 Inc (ASX: 360)
Taking the top spot as the best ASX SaaS share of 2021 is the high-flying family safety service, Life360. Shares in the company gained an impressive 156% in a busy year.
Investors took a closer look at Life360 after Randi Zuckerberg joined the board of the company. At the time, this was considered a vote of confidence to Wilson Asset Management portfolio manager Tobias Yao.
Since then, the company has gone on to make two acquisitions — Jiobit and Tile. These acquisitions totalled more than $200 million worth of investments in 2021.
