Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Catapult Group International Ltd (CAZGF, Financial) reported a 20% year-over-year increase in annualized contract value (ACV), reaching $96.8 million.
- The company achieved a 19% year-over-year total revenue growth, reaching close to $58 million.
- Free cash flow significantly increased to $4.8 million in the first half of FY25, surpassing the entire free cash flow achieved in FY24.
- The ACV retention rate remained strong at 96.2%, comparable to top enterprise software companies.
- The company experienced an 80% increase in multi-vertical pro teams, showcasing successful cross-selling efforts.
Negative Points
- The gross margin slightly declined by 0.7% year over year, impacted by the revenue contribution of the media business.
- The company decided to cease operations in Russia due to increasing restrictions, impacting future revenue by less than 1%.
- There was an increase in share-based payments due to changes in accounting valuation methodology and a rise in share price.
- The NFL's adoption of Catapult's sideline video solution remains uncertain, with no clear timeline for decision-making.
- The company is not yet fully independent of its debt facility, with a remaining debt balance of $5 million.
Q & A Highlights
Q: Has there been any change in terms of cash flow collections, or is this the new norm going forward?
A: Bob Cruickshank, CFO: Free cash flow is subject to timing nuances, especially with larger contracts. We've focused on building automation and processes around cash collections, which has benefited us. While there is seasonality, we aim for strong collections and a solid working capital position to become the new norm.
Q: With the video cross-sell, are we at a hockey stick inflection point, and what is your definition of medium term?
A: Will Lopes, CEO: The medium term is around 2 to 3 years. While it's too early to claim a hockey stick inflection point, the first half of this fiscal year showed strong growth, particularly in soccer. We aim to maintain this momentum.
Q: Regarding the cross-sell video, is displacing competitors like Huddle becoming less of an issue?
A: Will Lopes, CEO: The results reflect our success in cross-selling products, with 80% growth in multi-verticals, indicating that teams see the benefits of our product over competitors.
Q: What are the drivers behind the strong performance in wearables?
A: Will Lopes, CEO: The growth is due to expansion in Eastern and Northern Europe, the collegiate space in the US, and success in Latin America, including signing the Brazil national football team.
Q: How do you think about reinvestment now that you're profitable and the balance sheet is strong?
A: Will Lopes, CEO: We aim to be fully independent of our debt facility and focus on reaching the rule of 40. Once achieved, we will consider accelerating the top line while staying within our growth and profitability targets.
Q: How long is the exclusivity period with the SEC for the sideline video product, and when might you add other conferences?
A: Will Lopes, CEO: The exclusivity is multi-year, and we hope to expand relationships. Opportunities to enter other conferences may arise in the next 12 to 24 months, driven by the features and efficiency our product offers.
Q: How close is the NFL to adopting the sideline video solution?
A: Will Lopes, CEO: The NFL is monitoring the situation closely, but I can't speculate on their decision timeline.
Q: How much of the TNC A CV growth was due to the sideline video product?
A: Will Lopes, CEO: While we don't break down the specifics, the sideline video product significantly contributed to our growth, and the integration of SPG has been successful, driving multi-vertical growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
