Release Date: September 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GetBusy PLC (FRA:1H91, Financial) has maintained a consistent CAGR of about 14% since its IPO in 2017, growing its ARR from approximately GBP3 million to GBP21 million.
- The company has a strong balance sheet with a healthy cash balance and a GBP2 million debt facility, ensuring it is well-capitalized for future growth.
- GetBusy PLC's Virtual Cabinet business unit is highly profitable, with EBITDA margins of about 40%.
- The company is expanding its addressable market by targeting new customer types with greater financial characteristics, leading to higher average sale prices and lower churn rates.
- GetBusy PLC is investing in AI to enhance its applications, leveraging a rich data set of over a billion unique documents to provide intelligent features like smart prioritization and document summarization.
Negative Points
- ARR growth in the first half of 2024 was below expectations, indicating potential challenges in achieving medium and long-term goals.
- The company experienced a 4% reduction in paying users, contributing to softer growth than in previous periods.
- Consolidation in the UK accounting market has negatively impacted growth, with two significant customer churn events in the first half of the year.
- The integration with Thomson Reuters' UltraTax is expected to take a couple of years to achieve mass adoption, delaying potential growth acceleration.
- The company has not yet received its expected R&D tax credits, impacting cash flow in the first half of the year.
Q & A Highlights
Q: The half-year results reconfirmed revenue expectations of just under GBP23 million, implying an acceleration of revenue growth in H2. Do you expect this revenue growth to come primarily from SmartVault or from Workiro?
A: The growth is expected to be a combination of both. Key initiatives include expansion through the unlimited plan, enhanced partner sales to the Thomson Reuters base, and continued efforts within the Intuit space. Additionally, the SmartVault acquisition is anticipated to contribute significantly to H2 growth. H2 is traditionally a busy season for us as accountants start looking for tech solutions.
Q: Has the consolidation in the UK accounting market slowed growth, and is this trend similar in the US market?
A: The UK market is more saturated with document management software compared to the US. In the US, we deal with smaller firms, which are less affected by consolidations. However, these firms are under pressure to become more competitive, which could be favorable for us as they seek to automate more within their tech stack.
Q: When would you expect to start seeing the benefits of integration from Thomson Reuters UltraTax?
A: The integration was launched halfway through last year, and while it will take time to build brand recognition, we expect it to be a catalyst for growth. It may take a couple of years for mass adoption, but once achieved, it will significantly accelerate SmartVault's growth.
Q: Are there any capacity considerations with the premium accounting unlimited plans?
A: There are no bottlenecks in deploying these plans. The focus is on encouraging customers to move to these plans through customer marketing and success management. We are cautiously diverting resources to support this transition and will invest more if we see positive uptake.
Q: Do you have any KPI targets for paying user subscribers?
A: We do not primarily use user numbers for planning. Instead, we focus on the monetary value of ACB. While user growth and ARPU are important, we find it more effective to plan based on monetary values due to the volumes we handle.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
