Intelligent operations platform provider Checkit (CKT) released a trading update for FY24 ended January 31, 2024. The group announced annual recurring revenue growth of 16% to £13.3m, in line with expectations, while total revenue increased by 17% to £12.0m.
Checkit anticipates losses (adjusted LBITDA) to be better than expected and nearly halve for the year to £3.4m from £6.4m in FY23, as the group focused on increasing operational efficiency and cost control.
Cash on January 31, 2024 was £9.0m from £12.8m a year ago, reflecting the 46% reduction in LBTIDA and strategic purchase of inventory to mitigate supply chain constraints. Checkit expects this position to unwind over the next 12-18 months, supporting further revenue growth.
In terms of product development, the company said it added new functionality to its products via new AI and ML tools that should allow customers to deliver on higher sustainability and energy saving targets, and benefit from predictive maintenance of their assets. The new features are currently being trialed by one of Checkit's largest customers.
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A positive update from Checkit, showing substantial progress toward profitability as losses halved and revenue jumped 17%. The increase in recurring revenue provides good visibility for FY25 and beyond, underpinned by a high net revenue retention of 111%. The new enhanced AI and ML products are cutting-edge and should further help recurring revenues and customer retention in the near term.
Checkit's 'Land and Expand' strategy of upselling and cross-selling generated significant growth from existing customers during the period, with recurring revenues now representing 93% of the total. The focus on gross margin expansion helped halve losses to be better than expected, further helped by active cost control measures. Geographic expansion is also ongoing with 26% of ARR now generated in the US.
Full FY24 results are expected in April 2024.
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