Revenue growth of nearly a quarter and a narrower loss marked Ottawa-based talent management firm Halogen Software’s (TSX:HGN) inaugural quarter as a publicly traded company.
© Mark Holleron
Halogen Software CEO Paul Loucks.
The company announced the results for its three-month period ending June 30 on Thursday, the first earnings disclosure since its initial public offering in May.
Total revenue increased to $11.4 million during the most recent quarter, a 23 per cent jump over the same period in 2012. The net loss fell to $2.7 million, down from $3.4 million a year earlier.
Paul Loucks, the firm’s CEO, said he is excited about Halogen’s growth in recurring revenue, which comes from regular customers who continue to use the firm’s services.
Halogen provides subscription-based, software-as-a-service management solutions targeted at customers in the mid-market range, meaning recurring revenue makes up the vast majority of the money it brings in.
This increased 26 per cent from last year to end up at $10.1 million during the most recent three-month period.
"We're pleased with our strong progress in the second quarter," said Mr. Loucks in a statement.
"We continued to deliver high growth rates in our recurring revenue thanks to a combination of attracting new customers and generating more revenue from our existing customers, who continued to renew with us at a rate greater than 90 per cent reflecting the quality of our offering and our world class customer experience."
The firm is optimistic the infusion of cash from its initial public offering will help it to further expand into domestic and international markets while at the same time assisting with investment into new product development.
Prior to the earnings report being released, the company’s stock price closed more than 14 per cent above the initial public offering price after its first day of trading on May 17. The company raised $52 million in total, Mr. Loucks said in a conference call with investors on Thursday.
"There is a large and untapped market for talent management software solutions among global mid-sized organizations, our target market,” said Mr. Loucks in the statement. “We intend to invest aggressively to capture much of this market while helping our customers build world class workforces.”
The company is also optimistic about the firm’s chances in international markets such as Australia and the U.K., he said in the conference call. Internationally, its number of customers and growth rates are both up.
The firm expects its revenues will continue to grow in the future. Its projections call for total revenue to be somewhere between $11.8 million and $12 million for the third quarter of 2013.
However the company’s prospectus – a document issued to potential buyers prior to going public – said it anticipated having losses “for the foreseeable future.”