Here’s why the Nitro Software (ASX:NTO) share price is surging 7% higher today

The Nitro Software Ltd (ASX: NTO) share price is surging higher on Wednesday morning. Here’s why investors are buying its shares…
The post Here’s why the Nitro Software (ASX:NTO) share price is surging 7% higher today appeared first on The Motley Fool Australia. –

hand on touch screen lit up by a share price chart moving higher

The Nitro Software Ltd (ASX: NTO) share price has been a very strong performer on Wednesday morning.

In early trade, the document productivity software company’s shares are up 7% to $3.27.

Why is the Nitro share price surging higher?

Investors have been buying the company’s shares following the release of its fourth quarter update this morning.

According to the release, the company completed the fourth quarter and FY 2020 with annualised recurring revenue (ARR), subscription revenue, and cash receipts above its prospectus forecasts.

In respect to its ARR, Nitro finished the year with ARR of US$27.7 million, which was up 64% on the prior corresponding period. This also compares favourably to its previously upgraded guidance of US$26 million to US$27 million.

Nitro also revealed that its subscription revenue has now increased to approximately 58% of total revenue and comprised approximately 78% of revenue across the dominant Business sales channel. It notes that this reflects strong progress in Nitro’s transition to a subscription revenue model.

The company now serves 11,700 business customers, including 68% of the Fortune 500, and saw over 1 million Nitro Sign eSignature requests sent during the year. Key expanding and renewing accounts in the period included Lufthansa, Swiss Mobiliar, Pike Corporation, PPD, USI Insurance, and Citco.

What about its full year results?

In respect to its full year results, Nitro expects to report total FY 2020 revenue in line with its prospectus forecast of $40.5 million.

Management also advised that it expects to post an operating loss (excluding share-based payments and FX) within the range of $2.1 million to $2.6 million. This compares to its prospectus forecast of a $4 million operating loss. This better than expected performance was due to the slower pace of planned hiring and lower required marketing investment to achieve its sales goals.

At the end of the period, the company had a cash balance of US$43.7 million and no debt. Management believes this provides it with a strong financial position to pursue growth opportunities.

Nitro’s CEO and Co-Founder, Sam Chandler said: “We achieved a very strong finish to 2020 as the transition to digital workflows and productivity anywhere remains a priority for organisations of all sizes. Our results are testament to the quality of our products and the incredible efforts of the Nitro team in delivering continued acceleration in subscription sales and revenue. As the world navigates the ongoing disruption caused by the COVID-19 pandemic, we will continue to provide our customers with best-in-class solutions for remote work and digital productivity.”

“We’re honoured to serve 11,700 Business customers, including 68% of the Fortune 500, and we look forward to continuing to drive digital transformation around the world in 2021 and beyond,” he concluded.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Here’s why the Nitro Software (ASX:NTO) share price is surging 7% higher today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!