Platform provider Checkit (CKT) released its unaudited results for the six months ended 31 July 2023, noting annual recurring revenue jumping 24%, driven by strong US growth, with Checkit’s overall performance accelerating the company towards profitability.
Annual recurring revenue grew by an impressive 24% to £12.6m, driven by its ‘land and expand’ strategy coupled with high retention rates. Strong performance continued in the US, with ARR up 41% to £3.2m in the region. Checkit said the US is expected to become the largest contributor to revenues.
Gross profit increased by 30% to £3.9m, with gross margins improving from 63% to 69%, reflecting cost savings in hardware and platform procurement efficiency. Operating expenses decreased 12% in the period.
Operating efficiencies resulted in adjusted LBITDA from continuing operations reducing by 47%to £1.9m, and cash stood at a healthy £12.8m at 31 July 2023.
In the period, Checkit signed a master service agreement with Compass Contract Services. Since the signing of the MSA, Checkit has secured three new contracts with Compass. It has also renewed its largest contract with John Lewis at £6m over three years in the period.
Checkit added it has successfully converted into a pure-subscription business - with recurring revenues now representing 95% of total revenue - with the transition providing it with strong revenue visibility.
Kit Kyte, Chief Executive Officer, commented: "Checkit is on an accelerated track to profitability. We're scaling growth through our land and expand model, while prioritising operational efficiency and cost reduction. Despite the challenges in the wider economy, our diverse customer base and a product suite that is built to deliver operational efficiency uniquely positions us for market capture."
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Checkit is a UK-based company that provides solutions for improving operational efficiency and compliance across various industries. It offers a range of software, hardware, and monitoring systems designed to streamline tasks, enhance productivity, and ensure regulatory adherence.
Checkit’s applications have mostly focused on food service operations and ensuring compliance in the storage of medical products and samples, although its platform is widely applicable across many industries and has recently expanded into care home facilities management to help with safety and maintenance. Checkit’s suitability for many industries puts it in a prime position for future growth opportunities.
Moving forward, high net revenue retention rates - standing at 113% - underpin its continued contract momentum, and Checkit is confident in delivering an operating performance for FY24 ahead of current market expectations.
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