Silverlake Axis has reported earnings of RM59.6 million for its 2QFY2021 ended Dec, up 72% y-o-y. Revenue in the same period was up 29% y-o-y to RM206.5 million, led by higher software licensing revenue.
For 1HFY2021 ended Dec 2021, earnings was up 40% y-o-y to RM94.7 million, while revenue was up 16% y-o-y to RM358.5 million.
The company, which provides software for the regional financial services industry, has been trying to increase its proportion of recurring revenue which gives better earnings visibility, versus project-based ones, which tend to be more volatile.
For 2QFY2021, recurring revenue was up 9% to RM144.5 million, which is equivalent to 70% of its total sales.
The company sees an “encouraging” 2HFY2022 and beyond, citing its resilient business model.
“The momentum is accelerating and we are experiencing increased activity from our customers” that’s approaching pre-pandemic levels, the company states.
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“We have now reached an inflection point in our key markets, the pandemic has reached an endemic phase and we are cautiously optimistic of the group’s prospects over the medium to long term with a robust pipeline of opportunities being evaluated and the conversion has been encouraging,” says managing director Andrew Tan.
Thus far this FY2022, more than RM300 million worth of new contracts have been closed, “far exceeding” the same time for both FY2020 and FY2021.
While larger deals take a longer time to ink, the company sees “continued success: closing smaller ones.
Silverlake Axis shares closed Feb 14 at 27 cents, down 1.82% for the day and 6.9% year to date.
