Symbio posts modest growth after cutting costs

Voice communications software vendor Symbio has reported modest revenue growth thanks to reduction in costs and growth in some of its business divisions.

In the year ended 30 June 2023, the ASX-listed firm reported revenue of $210.8 million, up from $202.6 million in FY 2022, while recurring revenue was $121.3 million, up 8 percent from $112.3 million year over year.

Underlying EBITDA was $27.7 million, down from $35.4 million last year, while net profit after tax declined from $5.8 million in FY2022 to $1.8 million.

“Symbio has adapted to the challenging market conditions faced in the first half of FY23. We responded quickly by optimising expenditure across the business, including $2 million in CapEx, reductions in discretionary spending, and further reductions across the business,” Symbio group chief executive Rene Sugo said.

“With operating conditions now stabilising, we have returned to organic growth, retained all strategic customers, and achieved long-term contract renewals."

"We have also grown our market share in the face of increased competition.”

Sugo said the Australia and New Zealand businesses have met expectations, although at a slower pace due to the softness of the economy. Symbio’s Asian expansion meanwhile has almost doubled its total addressable market (TAM) with its launch in Malaysia.

“Our three specialised business divisions continue to drive growth both domestically and in Asia,” Sugo added.

“Communications platform as a service (CPaaS) recorded a 11 per cent growth in phone numbers, telecommunications as a service (TaaS) SIOs grew by 10 per cent, and unified communications as a service (UCaaS) seats grew by 143 per cent, including organic growth and growth from our acquisition of Intrado Australia’s Cisco-focused end-to-end Cloud Calling, Contact Centre, and Collaboration business in February 2023.”

Symbio has also invested in its technology platforms and launched new products across its divisions, including automation, low code/no code and self-service tools.

Some launched include cloud-based telephony solution Microsoft Operator Connect, its CPaaS division’s Connect customer portal and the UCaaS division’s Enterprise Portal.

Looking ahead, Symbio expects EBITDA to be in the range of $30 million to $35 million in the 2024 financial year.

“Despite setbacks in the first half of FY23, the strength of our business, unique value proposition, and clear strategic vision continue to drive business outcomes and position Symbio for long-term recurring revenue and margin growth.”

“Looking ahead at FY24, Symbio will continue to implement strategic projects that allow us to reduce our cost base, creating further efficiencies that will set us up to return to EBITDA growth this financial year."

"The board and management are committed to maintaining a flat cost base across operating and capital expenses for the medium term.”