Spacetalk (ASX:SPA) share price surges 15% on record revenue increase

Spacetalk shares are on the move during today’s session.
The post Spacetalk (ASX:SPA) share price surges 15% on record revenue increase appeared first on The Motley Fool Australia. –

The Spacetalk Ltd (ASX: SPA) share price has soared into the green during Thursday’s session as the wearable communications company reported its FY21 earnings.

Let’s investigate further.

Spacetalk share price jumps on 44% revenue increase

The company detailed several investment highlights in its report, including:

Revenue of $15.1 million, a 44% year on year increase and record for the company

EBITDA of $1.1 million, up 615% year on year
Device revenue grew 65% to $10 million
Wearables revenue of $12.75 million that also grew 65% over the year prior
Cash balance of $4.2 million which expanded 32% over the year
Decreased the debt load by 60% to $1.27 million

Earnings per share (basic) cents increase of 65%.

What happened in FY21 for Spacetalk?

It was the best quarter on record for Spacetalk in terms of revenue, which came in at $15.1 million. Positive EBITDA that grew more than 600% from the year prior was underscored by “strong device sales” of $10 million.

For instance, Australian and New Zealand device sales grew by 85% to $9.1 million whereas UK sales were flat from the previous year.

In addition, sales benefited from “more than one Spacetalk device being offered in the same category for the first time” in the company’s history.

As an example, this was attributable to the Spacetalk Kids and Adventurer devices in the children’s domain. Moreover, the Spacetalk LIFE device defined a new category “of seniors connected wearables”.

Moreover, app revenue also grew 75% to reach $2.2 million, driving annual recurring revenue of $2.8 million. That’s an 88% year-on-year increase.

The company said it managed to “meet its MNO and mass market retailer inventory demands”, successfully navigating its way through COVID-19 to do so.

What did management say?

Speaking on the Spacetalk Adventurer’s success to date, Spacetalk management said:

Spacetalk Adventurer has been a particular success since its
launch in December 2020 and is our flagship device, accounting
for 41% of device sales revenue achieved in just over six months
of the year ended 30 June 2021 (versus 55% for Spacetalk Kids
and 4% for Spacetalk LIFE, which sold for the whole year).

Moreover, touching on the company’s operating leverage, it added:

The strong global growth in the kids smartphone watch category,
and the urgent focus of retailer and MNOs, has enabled us to
increase sales while decreasing our Customer Acquisition Costs1
(“CAC”) to $1.5 million (-14%), as the Company increasingly benefits
from operating leverage.

What’s next for Spacetalk?

According to the company, it is “well positioned for strong growth in FY22”.

For instance, it is committed to expanding Spacetalk Life for seniors to a business-to-business model, where it is seeing “strong interest” from aged care providers.

In addition, it is working with a handful of NDIS and aged care providers to pilot a strategy to “enable over 39,000 Aged care and NDIS service providers promote and sell Spacetalk Life”.

Investors have favoured the news, pushing the Spacetalk share price well into the green on Thursday. Spacetalk shares are now exchanging hands at 19 cents apiece, a 15% jump from the open.

This extends the run into the green for the Spacetalk share price, which has climbed 73% since January 1. As such, Spacetalk shares have outpaced the S&P/ASX 200 Index (ASX: XJO)’s gain of around 14% this year.

The post Spacetalk (ASX:SPA) share price surges 15% on record revenue increase appeared first on The Motley Fool Australia.

Wondering where you should 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 could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

Why BHP, Codan, IGO, & Origin shares are dropping

Maggie Beer (ASX:MBH) share price soars on $54 million revenue
Why the Family Zone (ASX:FZO) share price is leaping 15%
Auckland Airport (ASX:AIA) share price edges lower in company’s first full-year of underlying loss
Redbubble (ASX:RBL) share price bounces 40% off Thursday lows

The author Zach Bristow has no positions on any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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!