itim Group (ITIM ), a SaaS technology company focused on helping its retail clients deliver improved omni-channel services, announced results for the year ended 31 December 2022 (FY22).
itim's revenues increased by 4% to £14m and annual recurring revenue (ARR) increased 19% to £13.2m, up from £11.1m in FY21. Recurring revenues represented 84% of total revenues, up from 77% in FY21.
Gross margins fell to 32% from 41% in FY21 due to heavy upfront investments and customer signups. Adjusted EBITDA was £0.2m and adjusted EPS was -2.01p.
itim's closing cash balance was £3.9m, down from £6.2m on 31 December 2021.
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itim delivered full-year results in line with expectations with moderate 4% revenue growth and significant 19% ARR growth. The company's focus on product development, strengthening recurring revenues, and diversifying its customer base helped it beat macroeconomic headwinds. Gross margins fell to 32%, but are expected to recover later in the cycle as recurring revenues from new customer contracts kick in.
EBITDA and EPS decreases resulted from upfront R&D and staff investments as well as wage cost inflation ahead of sales growth. Again, a recovery is expected, helped by a heightened focus on cash conversion and margin improvement by reducing incentives to customers, as well as a relaunch of the company's consultancy business. itim's closing cash balance decreased from last year, but was still a healthy £3.9m.
In summary, itim's results were good considering the company's rapid sales growth put pressures on cash flows, which we expect to alleviate in coming quarters. With over 80 existing customers providing recurring revenues, a comfortable cash position, and new offerings in the pipeline, itim remains well-positioned for continued growth.
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