Thu Sep 12 10:36:00 UTC 2024: ## Checkit PLC Reports Strong H125 Results, Maintaining Growth Trajectory

**London, UK – [Date]** – Checkit PLC (LON:CKT), a leading provider of connected operations management solutions, today announced strong half-year results for H125, demonstrating continued growth and progress towards its financial targets.

The company reported a 9% year-on-year increase in Annual Recurring Revenue (ARR) to £13.8m, driven by both new customer acquisition and strong growth from existing customers. This expansion highlights Checkit’s successful “land and expand” strategy, with over half of the ARR growth stemming from upselling and cross-selling to existing clients.

While new order intake saw a positive 38% year-on-year jump to £1.2m, the company experienced higher-than-average churn, leading to a gross revenue retention (GRR) of 95%. This is attributed to the loss of a few non-core and low-margin customers. However, management expects churn to return to more normalized levels in the coming period.

The strong performance in ARR translated into a 16% year-on-year increase in revenue, reaching £6.7m. The company also managed to reduce its EBITDA loss to £1.4m compared to £1.9m in H124, signifying progress towards its target of reaching EBITDA break-even by FY27.

**Key highlights from H125:**

* **ARR growth:** 9% year-on-year to £13.8m
* **Revenue growth:** 16% year-on-year to £6.7m
* **EBITDA loss:** Reduced to £1.4m from £1.9m in H124
* **Net cash:** £7.0m at the end of H125
* **New order intake:** £1.2m (+38% y-o-y)
* **Gross revenue retention (GRR):** 95%
* **Net revenue retention (NRR):** 109%

**Outlook Remains Positive:**

Despite the increased churn, Checkit remains confident in its outlook, reiterating its target of achieving consensus revenue and EBITDA forecasts for FY25 and reaching EBITDA break-even in FY27.

The company is focused on expanding its presence in the US market, where ARR grew 13% year-on-year to £3.7m. It is also seeing success with its newly launched Asset Intelligence module, which has already secured two customers.

**Valuation and Potential:**

Checkit currently trades at a significant discount to its UK software sector peers and US SaaS counterparts. Analysts believe that consistent ARR growth coupled with progress towards profitability should narrow this gap. Once the company achieves EBITDA break-even, operational leverage is expected to drive rapid margin expansion.

**Conclusion:**

Checkit PLC’s H125 results demonstrate the company’s continued growth and commitment to its strategic goals. While the higher churn rate presents a short-term challenge, the company’s strong revenue growth, EBITDA improvement, and expanding customer base suggest a positive outlook for the future. Investors are likely to watch closely as Checkit progresses towards profitability and seeks to close the valuation gap with its peers.

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