The Siteminder Ltd (ASX: SDR) share price is down slightly even though the S&P/ASX 300 Index (ASX: XKO) stock reported another solid three months of growth.
SiteMinder provides software for the hotel industry. It allows accommodation operators to manage and streamline the distribution of rooms across a wide selection of direct and indirect channels, take bookings and communicate with guests. The company has offices across multiple continents.
At the time of writing, the SiteMinder share price is down 0.5%, trading at $3.91.
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Strong start to FY24 for the ASX 300 stock
SiteMinder announced in its trading update that revenue for the three months to September 2023 had increased 30.8% to $46.8 million. The company said it had sustained the strong momentum in subscription revenue growth seen in FY23. However, transaction revenue was "impacted by abnormal seasonality in the prior year".
The company said that its annualised recurring revenue (ARR) increased 32.1% to $191.6 million.
Another positive was that net subscriber additions accelerated "meaningfully" compared to the first quarter of FY23, according to the company.
SiteMinder advised transaction 'attachment' continued to grow, with 'demand plus' leading transaction products in adoption and new implementations. Booking activity growth via demand plus also accelerated during the quarter.
In terms of profitability and cash flow, underlying free cash flow was negative $5.5 million. At (11.9%) of revenue, this represented an improvement on the prior quarters and was despite the FY23 annual cash incentive of $2.4 million being paid in the FY24 first quarter. Reported operating cash flow was negative $0.2 million.
The ASX 300 stock also advised that at 30 September 2023, it had $45 million of cash, $2.1 million of term deposits and $31.3 million of undrawn debt facilities, making $78.4 million of total liquidity.
CEO comments
The SiteMinder CEO and managing director Sankar Narayan said:
With strong growth and improving free cash flow, the past quarter demonstrated our continued progress in building a profitable SiteMinder.
As shared at our recent investor day, we have entered the next exciting phase of our journey, taking on the ambitious mission of making available the critical and untapped capability of sophisticated revenue management to every hotel in the world.
This mission is transformational for both SiteMinder and the hotel industry at large. Through rigorous capital allocation, we are pursuing this significant opportunity that's uniquely available to us while ensuring our path to profitability.
Strong growth guidance maintained
The ASX 300 stock reassured investors that its growth guidance was unchanged, and it continued to target organic revenue growth of 30% in the medium term.
SiteMinder expects to be profitable at the underlying earnings before interest, tax, depreciation and amortisation (EBITDA) level and to generate positive underlying free cash flow in the second half of FY24.
Siteminder share price snapshot
Since the start of 2023, Siteminder shares have climbed almost 30%, as we can see in the chart below.
