Elmo share price soars on 30% revenue boost and optimistic FY23 guidance

The Elmo share price soared by 17% in early trading today.

| More on:
Man looking excitedly at ASX share price gains on computer screen against backdrop of streamers

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

Key points

  • The Elmo share price soared by 17% in early trading after the company released its preliminary unaudited results for FY22 and positive guidance for FY23 
  • Elmo reported a revenue boost of about 30% in FY22 
  • Elmo is expecting to reach breakeven point on its operational cash flow in FY23 

The Elmo Software Ltd (ASX: ELO) share price is flying today, up 17% in early trading before settling.

This follows the software‐as‐a‐service (SaaS) company releasing its preliminary unaudited results for FY22 and positive guidance for FY23.

The Elmo share price opened at $2.63 and is now $2.68, up 10.29%. In earlier trading, it reached $2.85.

Elmo share price up 17% on 'strong' ARR growth

The highlights are as follows:

  • Revenue of $91.4 million, up 32% on the previous corresponding period (pcp)
  • Annual recurring revenue (ARR) of $108.2 million, up 29% compared to 30 June 2021
  • Cash receipts of $116.9 million, up 46% pcp
  • Underlying EBITDA of $7.1 million, up $6.5 million pcp and above the top of the upgraded guidance range
  • $47.9 million cash balance
  • Total operating cash outflow of ($17.4 million), a 34% improvement pcp.

What else happened in FY22?

Elmo offers cloud‐based services to small and medium-sized businesses on an SaaS model to help them manage staff, processes, wages, and expenses.

In its statement, Elmo said the business was starting to 'reap the benefits of scale'.

This follows many years of investment and development not only in the product but also in the team. Elmo was established in 2022.

More small and medium-sized businesses are adopting cloud‐based technology to manage themselves. Platforms like Elmo are particularly relevant in today's age of more people working from home or on a contract basis. This is reflected in Elmo's ARR, which went above the $100 million milestone in FY22.

What did management say?

Commenting on the results, CEO Danny Lessem said:

We are now experiencing the benefits of scale as a result of the many years of growth and investment into the product and team.

The investment phase has been materially completed and the existing cost base will be leveraged through FY23. As a result, underlying EBITDA came in at positive $7.1 million, up $6.5 million pcp.

Our strong brand in the markets we operate, our many years of investment into our product and the increased adoption of people management software, have ensured that we have strong momentum going into FY23.

Despite the broader macroeconomic environment, this momentum is supported by our sales pipeline which underpins our FY23 guidance.

What's next?

Increased operational efficiencies mean Elmo now expects to reach operational cash flow breakeven in FY23.

Elmo's guidance for FY23 is:

  • ARR of $134 million to $140 million with organic growth of 24% to 29%
  • Operating cash flow breakeven
  • EBITDA of $20 million to $25 million.

Elmo also released a business update today. In it, Elmo reports a compound annual growth rate (CAGR) for its ARR of 37% since FY18.

Elmo share price snapshot

The Elmo share price has fallen by 42% in the year-to-date. It hit a 52-week low in late June.

As an ASX tech share, Elmo has been hit hard by the market sell-off in 2022.

The S&P/ASX All Technology Index (ASX: XTX) is down 29% in the year to date.

Should you invest $1,000 in Meteoric Resources Nl right now?

Before you buy Meteoric Resources Nl 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 Meteoric Resources Nl 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 Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Elmo Software. The Motley Fool Australia has positions in and has recommended Elmo Software. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

a group of people sit around a computer in an office environment.
Earnings Results

Guess which ASX 200 tech stock is rocketing 12% on record results

Another half, another record result from this high-quality company.

Read more »

A young man sitting at an outside table uses a card to pay for his online shopping.
Consumer Staples & Discretionary Shares

Why is the Kogan share price crashing 12%?

Profits are down at this ecommerce company during the second half.

Read more »

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

Guess which ASX 200 mining stock is sinking 7% following its quarterly update

Let's see how this miner performed during the third quarter.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

Up 50% in a year, are Xero shares a buy after Thursday's earnings results?

ASX investors reacted positively to Xero’s full-year earnings results on Thursday. Now what?

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Earnings Results

Xero share price higher despite FY25 earnings miss

The cloud accounting platform provider reported strong top line growth but its earnings fell short of expectations.

Read more »

A man looking at his laptop and thinking.
Earnings Results

Why did the Aristocrat share price just plunge 13%?

Investors are smashing the Aristocrat share price today. But why?

Read more »

A woman wearing yellow smiles and drinks coffee while on laptop.
Earnings Results

CBA share price edges higher on $2.6b quarterly profit

Let's see how Australia's largest bank performed during the quarter.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Technology Shares

Life360 share price rockets 14% on record Q1 result

This market darling's rapid growth has continued so far in 2025.

Read more »