Article by Sam Allert, Reckon CEO.
Reckon is proud to announce its full year results for 2023, with the company displaying robust growth across the board and a consistent commitment to key areas of development.
The Business Group continues to generate strong cashflow through products like Reckon One and Reckon Payroll, alongside strong performances from the Legal Group – largely focused on the US and UK legal firm markets.
“2023 was another strong year for us, delivering to our plan of maintaining revenue growth in the highly profitable and cash generating Business Group which then provides the flexibility to invest in our flagship product, Reckon One, together with the high growth opportunities provided by our US and UK focused Legal Group.”
Key highlights from the 2023 full year results
- $53m in revenue generated in 2023 with EBITDA of $20m and NPAT of $5m.
- An Annual Dividend of 2.5c fully franked was paid to investors in September 2023.
- Legal Group subscription revenue reports growth of 17%.
- Ongoing investment in cloud-based products to underpin future business growth.
- Over 105k cloud users on our SME products.
- 300k employees get paid annually in Australia via Reckon products.
- Six of the world’s top legal firms use our solutions.
Business Group and Legal Group drive consistent revenue growth
Reckon continues its intended mission of investing in the Business and Legal Groups to generate revenue, grow our client bases, fuel development and boost investor value.
“We have a clear plan to leverage the strong cash flow produced by our Business Group to invest in our flagship cloud products in both businesses, particularly the high growth opportunity presented by the Legal Group in the US and the UK.”
Legal Group continues to capitalise on broad opportunities in UK and US markets
One of the strongest performances, with a 17% subscription revenue uptick, comes from Reckon’s Legal Group, which operates primarily in the US and the UK markets.
Reckon’s Legal Group includes new cloud products such as BillingHQ and DataHQ, which are value-add solutions which enhance a legal firm’s legacy Practice Management software.
With the sheer size of these two markets (particularly the US legal firm market) and the quality and value of the Legal Group’s products, We see a broad opportunity for continued and consistent growth. In fact, to date, Reckon serves 8 of the 25 largest law firms in the US.
To pounce on this opportunity, Reckon will continue to invest in developing these product lines alongside a heavy devotion to sales and marketing. The market is particularly ripe for introducing cloud products to a legal market still heavily reliant on desktop software.
“The revenue growth in the Legal Group highlights the strength of the Legal Group’s core systems (scan, print and cost recovery software). The cloud platform products BillingQ and DataQ provide a value-add solution to Law firms on top of their legacy practice management systems, and our investment in BillingQ and DataQ presents considerable upside opportunity for Reckon given the size of the addressable market in the US and UK.”
Investment in cloud development ramps up
R&D is in our spotlight, with enough in the coffers to support vigorous cloud development. As the gradual fading of desktop products continues the world over, Reckon is firmly positioning themselves as a top tier cloud solutions provider.
To achieve this transition, we’re funneling revenue into both R&D and migration journeys across all product lines and Groups. The primary migration efforts are focused on upgrading customers from Reckon Accounts Desktop and Reckon Accounts Hosted to Reckon One and other mobile products.
“The strong performance in the business allowed us to continue to invest in Reckon One and mobile accounting and payroll solutions to facilitate the migration of customers from our legacy platforms and to entice new customers.”
The development of Reckon One and the migration of customers from our legacy products remains a multi-year journey, but we’re focused, and it’s underway. Reckon Payroll was a highlight of the year as we transitioned users from some legacy payroll solutions to our new Reckon One based payroll product.
Cloud user uptake and growth continues
Our building of a solid cloud-based user profile continues as the movement away from desktop solutions marches on. Reckon has now clocked over 105k cloud users on our SME products. With cloud a primary feature of future software solutions, Reckon is firming up our stance in this space.
“Cloud revenue and user growth in the Business Group remains a focus in a competitive market. We continue to look for opportunities to increase our client base as well as the potential wallet share from customers with add-on partners, including partners in financial services and payments processing.”
Shareholders in good hands as dividends continue and stability endures
Our shareholders continue to benefit from Reckon’s success, with a 2.5c fully franked dividend paid in September 2023.
“With our history of strong financial management and shareholder returns, our intention remains to pay one dividend annually in September.”
Shareholders will be buoyed by our strong results and clear path to growth and revenue, with our investment in the Legal Group and the continued development of Reckon One presenting the best opportunity to improve our valuation and shareholder return.
Sam Allert, Reckon CEO
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