Expert System (MI:EXSY) H118 results confirmed year-on-year sales growth of 52% and positive EBITDA. Over the last year, the business has seen strong demand for subscription licensing, resulting in recurring revenue increasing to 50% from 38% in H117. Management remains confident of meeting its FY18 guidance and we make minimal changes to our forecasts. Continued progress toward growth and profitability targets should support share price upside.
Solid H118 sales growth drives positive EBITDA
Expert reported sales growth of 52% y-o-y to €12.9m and an adjusted EBITDA of €0.6m. After one-off costs of €0.5m, it reported EBITDA of €0.1m, compared to a reported EBITDA loss of €4.0m in H117. Higher revenues combined with good cost control resulted in a normalised operating loss of €2.0m, significantly below the H117 operating loss of €5.6m. Licence revenues made up 41% of total revenues compared to 33% in H117, and within this, subscription licences made up 79% of licence revenues versus 33% a year ago.
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