Limeade [ASX:LME], developer of employee experience and listening software, reported challenges in the current market hampered progress.
Though it expects these to continue in the near term, the company believes it can still achieve 3–5 percentage point increases to gross margins in FY23, thanks to its cost savings plan.
LME posted a full-year loss of 33%, and EBITDA also dropped 33% to $7.7 million.
Revenue rustled up a slight 1% increase to $56 million.
Limeade’s stock rose 15% in the last week, after investors continued to show their support today, with a 3% increase to the stock’s value.
LME fell 6% over the year, and remains under the market average:
Source: TradingView
Limeade experiences investor support despite widening losses
Today, microcap software enterprise Limeade presented its 2022 financial year results, reporting a full-year loss of 33%.
Meanwhile, revenue had been mostly flat with $56 million, improving a mere 1% on FY2021.
The company drew up losses to $13.2 million and EBITDA — earnings before tax, interest, and similar impairments — had also taken a 33% loss, to the total of $7.7 million.
However, investors were not dismayed. The group posted these results with an explainer that they were within guidance, the company having been expecting such a result on continued market challenges.
During FY22, CARR (Committed Annual Recurring Revenue) was up 5% on the previous year, tallying up to $59.5 million.
This was made up of Limeade’s Well-Being CARR of $52.2 million, which increased by 5% on 2021 and Limeade’s Listening CARR, which contributed $7.3 million and grew 1% on 2021.
Increased customer retention and sizeable new enterprise sales contributed to the boost in CARR, with overall NRR (net revenue retention) at 86%, Well-Being NRR having increased 86%, while Listening moved slightly down.
LME’s gross profit margin declined 69% from 73% the previous year, and the company used $11.4 million in cash throughout 2022, mostly for software development and operating expenses.
The group said that its focus is on ‘operational excellence’ for profitability and positive operating cash flow.
On that note, the group’s cash position was last sitting at $2.6 million as at 31 December, with $2.5 million drawn and $3.5 million additional available on the company’s credit facility.
Limeade’s CEO Henry Albrecht stated:
‘In a market where predicting the short-term and beyond is challenging, we have begun executing a clear operational plan, led by proven professionals, that will increase the value we can deliver to our customers, deliver a more stabilized and sustainable cost structure and set us on a path to positive cashflow.
‘The company has shown resilience and focus in challenging times. We achieved CARR growth, led by performance in our core North American enterprise well-being market, while delivering a more modern and engaging technology platform.’
Limeade expects FY23 revenue to increase from FY22, the group having been inspired by the 5% higher year-end FY22 CARR over FY21.
The company also plans to deliver Adjusted EBITDA positivity in FY23, anticipating $7.0 million in annualised cost savings through its strategic restructure announced in January.
LME expects the restructure and related efforts to result in 3–5 percentage point increases in gross margins in FY23 versus 2021.
Are you prepared for the big economic shift?
Australia has serviced 30 years of abundant, robust trade…but that has now broken.
The change is all around us, the clues, the signs — everywhere. Most Australians just don’t know what those signs are pointing to, and what it all really means.
Jim Rickards, one of the world’s top financial and geopolitical analysts has joined the dots nobody else has — certainly not the mainstream media.
Australia is going to be looking very different very soon, and so will everyday life…
If you want to know how you can prepare for the biggest geoeconomic shift of our lifetime, click here.
Regards,
Mahlia Stewart,
For Money Morning
