Integrated Research Presents Half-Year Interim Results
IT development and solutions company Integrated Research [ASX:IRI] gave a balanced update as a reflection on the first half of the financial year, sharing positive predictions despite widespread cost pressure issues.
Shares for the software business were down 57% over 2022, but there is some hope to be found in the 11% rise in share price in the early days of 2023’s calendar year.
For reference, the S&P 200 [ASX:XJO] has only gone up by 3% year-to-date, in an overall lift in markets this morning.
Source: marketindex.com
Integrated Research’s EBITDA to rise alongside costs
The tech company released interim results this morning, with a warning for continuing cost pressures with travel and salary pressure areas of hyper-focus for the business in the new year.
IRI anticipates its pro forma revenue to come out at around $36–39 million, a 5–12% drop compared to the same period in 2022.
However, it wasn’t all bad news as IRI did come out with the surprising prediction that despite these limitations on its profit margin, it expects operating income (EBITDA) to expand between 15 and 30% in the first half of the year — in comparison to the same time last year.
IRI flagged a positive renewals period, which it said was helped through strength in new contracts.
Integrated Research’s product lines, Infrastructure and Transact, were also said to have grown, stabilising collaborative elements compared to preceding periods.
IRI celebrated a standout performance in the Asia-Pacific region, which had increased in growth by around 50–60%, with metrics tracking ahead of original expectations.
Commenting on the earnings guidance update, John Ruthven, IRI’s CEO, said:
‘Whilst it is early days, we are pleased with the progress made during the first half and note that confidence appears to be returning to the market. A good indicator of this is further improvement in contract length, now sitting at an average of 3.5 years for renewals and 4.1 years where new business and renewals are combined. Off the back of improved customer sentiment, we are also experiencing fewer delays in buying processes.
‘Recent field executive leadership changes are having good effect, with positive indications in our renewals and new sales cadence. For the balance of FY23, we remain focused on delivering on our key priorities, outlined at the time of IR’s FY22 full year results announcement.’
IRI enters 2023 with consideration to the path ahead
The software solutions company continues to strive to become an industry leader in global software, providing user experiences and performance management solutions for payment transactions and collaboration systems.
Working towards this goal, in the financial year of 2022, IRI undertook some major changes in the size, leadership, and organisation of its business.
These changes are hoped to lend strength in addressing the challenges faced in the ongoing trading environment, particularly as operations and expectations transition into the new year.
Despite the cost pressures, the company is anticipating statutory EBITDA for the first half of 2023 to reach the range of $7.8–8.8 million, which will be an increase of between 15–30% on the prior corresponding period.
IRI’s board intends to release more details for the interim results in another month.
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