MYOB hits 600k subscribers, eyes $400 million full-year

Australian accounting software stalwart MYOB has released its half yearly results, revealing subscriber and sales milestones and a $400 million full-year revenue trajectory.

Revenues for the six months to 30 June, 2017 increased to $204 million, up 14 percent from $178 million in the first half of 2016. Underlying EBITDA was $89 million, a $6.6 million, or nine percent increase in the previous period. Net profit after tax was $28.3 million, up 13 percent from $25 million.

MYOB's recurring revenue accounted for 96 percent of its total sales, largely driven by the SME segment, which the company said achieved 99 percent recurring revenue, growing 13 percent year-on-year. SME users increased as did the average revenue per paying user.

The business’ SME Solutions segment delivered $126.4 million in the half-year. Practice Solutions revenues were $43.5 million, Enterprise Solutions brought in $30.6 million and new segment Payment Solutions, coming from the 1 April, $48 million acquisition of Paycorp, got off the ground with $2.3 million.

Paying users in the SME segment increased by 5 percent on the previous year to hit 600,000, brought about by a 53 percent increase in online additions to 306,000, of which SME online grew 32 percent on the prior year to 257,000. The company also noted improved retention rates of paying customers and an increasing rate at which users moved from non-paid to paid versions of its software.

MYOB chief executive Tim Reed said a customer-focused strategy was delivering positive outcomes for the business.

“Our commitment to the connected practice strategy continues to position us as a leader in the industry, enabling digital transformation among SMEs and advisers, which remains central to our vision,” he said.

“Our focused investment in the MYOB platform remains a key driver of our success, as we continue to develop products and services that leverage artificial intelligence and machine learning to deliver best-in-class solutions to our clients.”

Reed said the company expected an acceleration in the growth of its online subscriber base in the second half of its 2017 financial year. The business has updated its FY17 revenue growth rate to be in the 13-15 percent range. MYOB's 2016 full year revenue was $370 million.

MYOB chairman Justin Milne said the surge in online subscribers reflected the company’s focus on its Connected Practice Strategy.

“MYOB continues to hold the highest penetration amongst SMEs and advisers across Australia and New Zealand, which continue to use our trusted and secure accounting solutions,” he added.

“Particularly exciting for MYOB this period is the integration of our new payments division and the opportunity this brings to significantly increase MYOB’s total addressable market to over $3 billion across all segments.”