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Siteminder Ltd (ASX:SDR) has seen its share price rise by 5% following a robust trading update for the fiscal year 2024 (FY24). The company, known for its eponymous software platform designed to maximize revenue for hotels, also offers Little Hotelier, a comprehensive management solution for small accommodation providers. Siteminder processes over 120 million reservations annually, totaling more than A$75 billion in revenue for its hotel clients.
Siteminder, an ASX technology stock, reported significant growth in its customer base, with an increase of 2,900 properties in the second half of FY24, compared to 2,500 in the first half. By the end of the financial year, the total number of customer properties reached 44,500.
The company saw substantial expansion in the Americas and EMEA (Europe, Middle East, Africa), with a 70% increase in the number of rooms compared to the same period last year.
Revenue for FY24 climbed 26% year on year to $190.7 million. Subscription revenue grew by 18.8% to $122.4 million, reflecting continued investment in attracting larger hotel clients. Transaction revenue also saw a notable rise, increasing by 41.2% to $68.3 million. The company’s metasearch service, Demand Plus, performed particularly well, benefiting from strong adoption and improved booking conversions.
Looking ahead to FY25, Siteminder’s growth trajectory appears promising, with annualised recurring revenue (ARR) of $209 million, marking a 20.8% year-on-year increase and a 9.6% rise compared to FY24 revenue.
In FY24, Siteminder reported an underlying free cash flow (FCF) of negative $6.4 million. However, the company achieved positive underlying FCF of $2.3 million in the second half of the year. Management highlighted that the improvement in margins demonstrates effective operating leverage and disciplined cost management.
Siteminder continues to target 30% annual organic revenue growth. The company’s strategy focuses on enhancing its platform to drive long-term growth and expand monetization opportunities. The goal is to achieve industry-leading software as a service (SaaS) economics.
Despite a 36% increase in its share price over the past year, Siteminder’s future prospects remain strong. Continued improvements in margins could offer a solid long-term opportunity for investors, even at a higher valuation.
