The Siteminder Ltd (ASX: SDR) share price is ending the week strongly.
In morning trade, the ASX All Ords share is up 22% to $4.30.
This means the hotel software company's shares are now up 65% since this time last month.
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Why is this ASX All Ords share rocketing higher?
Investors have been bidding Siteminder's shares higher today after the company released a trading update and guidance for FY 2024.
According to the release, SIteminder expects to report a 30.5% (27.3% constant currency) increase in revenue to $151.4 million for FY 2023.
This has been driven partly by an 18.7% increase in subscription revenues to $103 million. Pleasingly, this was underpinned by an acceleration in its growth during the second half.
Also growing strongly was its transaction revenue, which increased 65.6% to $48.4 million for FY 2023. However, on this occasion, its growth moderated in the second half as the business cycled abnormally strong comparatives due to the extended Northern Hemisphere summer travel season last year.
The ASX All Ords share also revealed that its annualised recurring revenue (ARR) increased 33.5% (24.1% constant currency) year on year to $173.1 million. This was supported by a 12.7% increase in the number of properties using its technology to 39,100.
Siteminder continues to make good progress on its positive free cash flow target. In the fourth quarter, it posted negative free cash flow of $5.3 million. This led to its FY 2023 free cash flows coming in at negative $34 million.
At the end of June, the company had cash and undrawn debt facilities totalling $83.6 million.
FY 2024 guidance
Pleasingly, management expects strong revenue growth and free cash flow improvements to continue in FY 2024.
In fact, ASX All Ords share is continuing to target organic revenue growth of 30% over the medium term. It expects this to lead to positive underlying EBITDA and underlying free cash flow for the second half of FY 2024.
Siteminder CEO and managing director, Sankar Narayan, said:
The past year has seen SiteMinder strengthen its go-to-market capability through the expansion of marketing and sales channels that reach hotels in more effective and targeted ways.
Concurrently, the normalisation of hotel booking activity around the world spurred hoteliers to increasingly engage with SiteMinder to access solutions that boost their revenue.
The combination of these factors have resulted in additions to our global customer base being almost double what they were in the same period last year. This growth, along with our cost reduction program, has put the business firmly on the path to become profitable in H2FY24.
