Symbio Holdings Limited (ASX : SYM) FY23 Results and Guidance

30 Aug 2023

Symbio Holdings Limited, a prominent software company that focuses on voice communications, has shared its financial performance for the entire year that ended on June 30, 2023. The company achieved its expected EBITDA (earnings before interest, taxes, depreciation, and amortization) within the upper range of its adjusted estimate. This accomplishment can be attributed to steady market conditions that propelled organic growth across its three business segments. Additionally, Symbio Holdings implemented a series of measures to enhance operational efficiency, resulting in a reduced cost structure going forward into the next fiscal year.

Symbio anticipates attaining an EBITDA range of $30 million to $35 million in the fiscal year of 2024.

- Consistent income increased by 8% to $121.3 million (Fiscal Year 2022: $112.3 million).

- The repeated profit margin increased by 6% to $69.4 million (in the fiscal year 2022, it was $65.8 million).

Currently responsible for 70% of the overall Gross Margin, amounting to $99 million.

- Fundamental EBITDA amounting to $27.7 million.

At the higher range of its adjusted forecast of $26 million - $28 million

- Maintaining a net profit after tax amounting to $12.2 million (compared to $20.1 million in the previous fiscal year)

- Profit per share of 2.08 pennies per share (for the financial year 2022: 17.29 pennies per share)

- Dividend fully paid with a rate of 3.4 cents per share (for fiscal year 2022, it will be 8.0 cents per share)

- The top 10 customers achieved a Net Revenue Retention (NRR) rate of 105%.

- The number of phone numbers has increased by 11%, reaching a total of 7.3 million (compared to 6.6 million in the previous fiscal year).

- Robust financial position with $35.8 million in liquid assets and zero liabilities as of June 30th, 2023.

Sharing his thoughts on the outcomes, Mr. Rene Sugo, the Co-founder and Group CEO of Symbio, expressed his views.

Symbio has adjusted to the difficult market circumstances encountered in the initial half of FY23. We promptly reacted by maximizing cost management throughout the company, which involved a $2 million reduction in capital expenditures, cuts in non-essential expenses, and more reductions across the entire organization.

After experiencing stable operating conditions, we have resumed experiencing natural expansion and have managed to maintain all of our key clients, as well as successfully extend our long-term contracts. Additionally, we have managed to increase our market presence despite facing heightened competition.

Our businesses in Australia and New Zealand have met our predicted results, although at a slower rate due to the weakened state of the economy. We are also making good progress with our expansion plans in Asia and were able to greatly increase our potential market by promptly establishing our network in Malaysia.

The growth of our company persists, thanks to the consistent progress of our three distinct business divisions, both within our home country and in the Asian market.

CPaaS experienced an increase of 11% in the number of telephone numbers, while TaaS SIOs saw a growth of 10%. Furthermore, the number of UCaaS seats grew substantially by 143%, which includes both natural expansion as well as the boost from our acquisition of Intrado Australia's Cisco-oriented Cloud Calling, Contact Centre, and Collaboration services in February 2023.

In the present year, we also introduced our South-East Asia Hub, an essential component of our growth in Asia, giving customers the ability to access multiple countries through one interconnection spot. This Hub model diminishes the expenses involved in handling numerous interconnections, enabling Symbio clients to thrive, connect, and extend their presence in a swiftly digitalizing area.

Due to our robust ability to generate cash and maintain a solid financial position, the board has decided to announce a final dividend of 1.7 cents per share, which will be fully franked.

As of June 2023, the number of phone numbers connected to the network surged by 11% compared to the previous year, reaching a staggering 7.3 million.

In the company's trading update in December 2022, there was a significant order for 400,000 phone numbers that caught the attention of the market. This order is expected to bring in revenue starting from the fiscal year 2024. The increase in phone numbers contributed to Symbio's recurring revenue, which saw a growth of 8% amounting to $121.3 million. This, in turn, led to a 6% rise in recurring gross margin reaching $69.4 million. Overall, the total gross margin experienced a 4% increase, reaching $99 million.

With a renewed emphasis on controlling costs, the board and management of Symbio are determined to keep expenses at a consistent level for the foreseeable future. This includes reducing capital expenditures by $2 million and keeping discretionary spending to a minimum. Overall, through careful cost management, Symbio was able to reduce capital and operating expenses by a total of $7 million during FY23. Despite implementing these cost-cutting measures, the Symbio team successfully carried out most of the strategic projects planned for FY23, positioning the company for a successful FY24 and beyond. Additionally, Symbio maintained a solid financial position with $35.8 million in cash and no debt as of June 30, 2023.

Achieving Expansion in the Asian Market

Symbio has made significant progress in expanding its operations in Asia this year. The company has expanded its market reach by almost two times by establishing its network in Malaysia. Furthermore, Symbio has also set up its South-East Asian Hub, which allows connectivity between Singapore and Malaysia through a single connection. By offering Symbio's unique intellectual property, the SEA Hub provides customers with cost savings and an appealing opportunity for accessing multiple countries and capitalizing on the fast-paced digital transformation in the region.

Taiwan continues to be an important region for investment, as Symbio's international clients have shown great interest. Currently, the company is working on a new plan to enter the organic market in Taiwan, as the potential acquisition targets in the area did not meet their desired pricing after thorough investigation.

Symbio intends to share more information about this altered strategy for entering the market in the coming days.

Symbio is presently directing its efforts towards introducing itself to the market in Taiwan and attaining profitability in Singapore and Malaysia. Nonetheless, it retains a keen interest in Japan, South Korea, and Vietnam, as it strives to advance its expansion plans in Asia. This will open up additional avenues for customers to explore untapped markets and foster growth.

The company made a significant investment in enhancing its technology systems and introduced significant new product projects throughout its various departments. These initiatives encompassed automation, tools that require minimal coding or no coding at all, and self-service options.

Noteworthy features entail the introduction of Microsoft Operator Connect, a cloud-oriented communication service enabling enterprises to establish a connection with the conventional telephone network via Microsoft Teams.

There has been notable advancement in automating processes and providing tools for customers to assist themselves. CPaaS has introduced the Connect customer portal, while UCaaS has launched the Enterprise Portal. These platforms enable customers to conveniently manage their services from one place. As a result, less time will be spent on tasks that directly involve customers, and the speed of processing customer requests will be enhanced. Additionally, the TaaS division has retired its outdated platforms, which has reduced expenses and enabled the division to begin FY24 on a unified platform.

Sharing his thoughts on the future prospects, Rene Sugo mentioned:

Despite facing challenges in the initial months of the fiscal year 2023, the robustness of our company, distinct value proposition, and well-defined strategic plan remain driving forces behind our achievements. These factors not only lead to ongoing revenue growth but also set the stage for sustained profit margins in the long run.

In the upcoming fiscal year 2024, Symbio will keep working on important projects that enable us to cut down our expenses, ultimately leading to improved efficiencies and the possibility of EBITDA growth. Both the board and management are dedicated to keeping our costs stable for the foreseeable future, including both operating and capital expenses.

The company anticipates reaching a range of EBITDA between $30 million and $35 million in FY24.

Our long-term plan remains the same. We are still making a profit, have no debts, and are successfully carrying out our goals for Vision 2030 as we continue to grow in the Asian market.

Having the necessary framework and technological resources to carry out our plan, we are committed to investing in expansion. Our regular income keeps growing as a result of our distinct product and esteemed clientele, which includes globally renowned software firms that have been increasingly seeking our services in the Asia-Pacific area.

We are making good progress towards achieving a point where our income and expenses will break even in Singapore within this fiscal year. Additionally, we will carry on with our plans to expand and strengthen our operations in Southeast Asia. This includes growing our network in Malaysia and venturing into the market of Taiwan.

Driven by our lofty aspiration to achieve a staggering 100 million figures connected to our network before 2030, our primary emphasis for the fiscal year 2024 will revolve around implementation, supremacy in software, and attaining profitability.

Join us for a live online event on Tuesday 29 August at 9:00 am, where we will be hosting a webinar and sharing the latest results presentation. To sign up and find out more information, kindly visit: https://investors.symbio.global/

To access the Investor Presentation, kindly go to: https://www.abnnewswire.net/lnk/U7BVDD59

To access the Annual Report, kindly go to: https://www.abnnewswire.net/lnk/OG40493Q

Symbio Holdings Limited, an entity engaged in various business activities, is the focal point of discussion in this blog. It will delve into the details of Symbio Holdings Limited and shed light on its operations and services.

Symbio Holdings Limited (ASX:SYM) is a tech company revolutionizing global communication methods.

Symbio's advanced technology supersedes outdated telecommunication networks with software, resulting in enhanced speed and convenience for the provision of contemporary cloud-centric communication services. This breakthrough opens up a plethora of innovative possibilities for making calls, sending messages, and utilizing phone numbers.

Symbio plays a vital role in the worldwide cloud communication sector. More than 500 service providers, ranging from telecom startups to renowned software giants, depend on Symbio to ensure seamless connectivity, top-notch quality, and valuable expertise in overcoming intricate communication obstacles.

Based in Sydney, Symbio is the driving force behind billions of phone conversations and text messages annually. It operates networks in three different nations and has a global workforce consisting of more than 450 employees.

To find out more about Symbio, check out their website at www.symbio.global.

Miki Kando, the executive assistant to the CEO and CTO, can be reached at +61-422-832-852 or via email at [email protected].

Contact information for Michelle LohCannings Strategic Communications is as follows: Phone: +61 497 834 937 Email: [email protected]