This ASX small-cap stock just rocketed 27% on its FY 2024 results. Here's why

The ASX small-cap stock is soaring after reporting its FY 2024 results. But why?

| More on:
A happy construction worker leap-frogs over another as a third looks on

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

ASX small-cap stock Hipages Group Holdings Ltd (ASX: HPG) is off to the races today.

Shares in the online tradie marketplace operator closed yesterday at $1.28. In earlier trade on Thursday, they leapt to $1.62 apiece, up 26.8%.

After some likely profit-taking, shares are swapping hands for $1.52 apiece at the time of writing, up 18.4%.

For some context, the All Ordinaries Index (ASX: XAO) is up 0.3% at this same time.

Created with Highcharts 11.4.3Hipages Group PriceZoom1M3M6MYTD1Y5Y10YALL1 Jun 202326 Feb 2025Zoom ▾Jul '23Oct '23Jan '24Apr '24Jul '24Oct '24Jan '25Jul '23Jul '23Jan '24Jan '24Jul '24Jul '24Jan '25Jan '25www.fool.com.au

This strong outperformance comes following the release of Hipages' financial results for the 12 months ended 30 June (FY 2024).

Read on for the highlights.

ASX small-cap stock soars on return to profit

  • Total revenue of $75.8 million, up 13% from FY 2023
  • Recurring revenue of $72.1 million, up 15% year on year
  • Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $16.4 million, up 33% from FY 2023
  • Statutory net profit after tax (NPAT) of $3.6 million, up from a net loss after tax of $5.1 million last year

What else happened with Hipages in FY 2024?

Atop the return to profit from a steep loss last year, the ASX small-cap stock looks to be grabbing investor interest after reporting record marketplace activity in FY 2024, with tradies competing for fewer jobs driving the 15% increase in recurring revenue.

Hipages said that its proactive marketplace management helped it achieve a 13% increase in monthly recurring revenue (MRR) and an 11% year-on-year increase in average annual revenue per unit (ARPU).

EBITDA margins also improved by 4% from FY 2023, coming in at 22% this year.

While operating expenses were up 9% from last year to $59.4 million, Hipages noted that operating expenses improved to 78% of revenue over the 12 months.

Operating cash flow was also up 23% to $19.3 million. This saw positive free cash flow at $2.1 million, following a $2.8 million cash outflow in FY 2023.

Over the year, connections increased 3% to 2.7 million, with the ASX small-cap stock noting a record 86% of all jobs connected with a tradie.

The year also saw Hipages roll out a range of new platform features and functionalities.

As at 30 June, the company had cash and funds on deposit of $21.3 million, with no debt

What did management say?

Commenting on the results sending the ASX small-cap stock soaring today, Hipages CEO Roby Sharon-Zipser said:

The value proposition of the Hipages online marketplace continues to build in the current uncertain economic environment. Tradie subscriptions are growing as tradies seek high quality leads and homeowners are benefiting from strong job connection rates, which now stand at a record 86%…

Our strong operating cash flow enabled us to continue investing substantially in optimising our business and building out the platform for the future.

During the second half we successfully launched our tradiecore single tradie platform and have a range of exciting upgrades and initiatives planned for FY 2025.

What's next for the ASX small-cap stock?

Looking at what might impact the ASX small-cap stock in the year ahead, Hipages said it was targeting "continued strong revenue growth" and further margin expansion, delivering positive free cash flow of $4 million to $6 million.

Sharon-Zipser said the upgrades planned for the company's platform features and functionality in FY 2025 were expected to "further increase our market penetration and better reflect the value of our services to tradies and homeowners".

The company's single tradie platform (STP) will continue to be rolled out to new customers over the coming months.

Hipages share price snapshot

With today's big lift in the Hipages share price factored in, the ASX small-cap stock is up 89% year to date.

Motley Fool contributor Bernd Struben 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 Hipages Group. The Motley Fool Australia has positions in and has recommended Hipages Group. 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 man looking at his laptop and thinking.
Earnings Results

ASX 200 tech stock down 10% despite 'continued progress' in H1 FY25

Investors obviously had higher expectations from the software platform.

Read more »

Man smiling at a laptop because of a rising share price.
Earnings Results

This $8.2 billion ASX 200 stock just rocketed 12%! Here's why

Investors are piling into the ASX 200 stock today. But why?

Read more »

Couple at an airport waiting for their flight.
Earnings Results

ASX All Ords stock down 20% after 'challenging environment' in H1 FY25

A sharp jump in dividends wasn't enough to sway investors today.

Read more »

gaming asx share price rise represented by slot machine paying jackpot
Earnings Results

ASX 200 gaming stock sees green following 'record revenue' in FY24

It was a year of modest growth for the gaming company.

Read more »

Man jumping in the air outside.
Earnings Results

Why is this ASX 200 share leaping 7% in today's falling market?

The ASX 200 share is surging on Wednesday even as the benchmark index sinks.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Earnings Results

Appen share price tanks 20% after 'transformative year' in FY24

It hasn't been a pretty reaction to the company's full-year numbers.

Read more »

A man slumps crankily over his morning coffee as it pours with rain outside.
Earnings Results

This ASX healthcare stock is crashing 30% on half year results

Why is this stock crashing deep into the red today? Let's find out.

Read more »

A man looking at his laptop and thinking.
Earnings Results

Readytech shares slide 15% as company 'reaches inflection point'

Investors were ready to unload shares from the open.

Read more »