Credit Clear reveals 95% increase in revenue to $21.5m for FY2022
Credit Clear reached profitability in May and June, and this has continued throughout the September quarter.
Following a new monthly record, Credit Clear (ASX: CCR) has posted a 95% rise in revenue to $21.5 million for the 2022 financial year ended June (FY2022).
In its latest annual report, Credit Clear noted the company has been expanding at a compound annual growth rate of 183% since FY2018 when revenue came in at $300,000.
The $21.5 million result was underpinned by a $3.1 million monthly revenue record in June.
Credit Clear’s annual revenue run rate has now climbed to $37.4 million.
The rapidly increasing revenue tipped Credit Clear into profitability in May and June, and the company said this has continued in the current September quarter.
Part of the push to profitability was a review of expenses in FY2022 and the cut of $1 million in annual costs.
The company closed out FY2022 with $10.2 million in the bank to fund its ongoing expansion plans.
Credit Clear chief executive officer Andrew Smith said the company had achieved profitability because it positioned itself in 2022 to lead the market as an “end-to-end credit management company”.
For the entire FY2022 period, normalised earnings before tax depreciation and amortisation (EBITDA) improved 83% to a $572,000-loss. This figure is before tech investment development costs.
Mr Smith said the company’s FY2022 performance reflected its “continued growth with profitability mindset”.
“Our investment in technology is focused on maximising near-term revenue opportunities, while ensuring ongoing investment into our technology product roadmap.”
ARMRA Group acquisition
A major milestone for Credit Clear in FY2022 was its acquisition in ARMA Group Holdings at the start of the calendar year.
Mr Smith was a co-founder of ARMA and was appointed to Credit Clear’s board as part of the takeover.
“By combining Credit Clear’s technology with ARMA’s operations we present the market with a truly differentiated offering.”
Credit Clear has developed an end-to-end digital billing and communications collections platform and once it acquired ARMA, its clients were transitioned to the technology.
“The results achieved since transitioning ARMA’s clients onto the Credit Clear platform have exceeded our high expectations,” Mr Smith said.
“ARMA provides the market with the perfect case study to demonstrate the performance uplift potential of the technology when a digital-first hybrid approach is adopted, using award-winning artificial intelligence software as broadly as possible – supported by highly trained collections staff.”
Operational milestones
Across FY2022, Credit Clear added 215 new clients to its platform – noting it also had a 99% client retention rate.
Of these, several are expected to become Credit Clears top 10 clients by revenue.
“Adding these large, high-profile clients allows us to prove our capabilities and service offering at the highest level of corporate Australia,” Mr Smith explained.
The ongoing investment in AI technology and software led to a 35% uplift in collections during the year.
According to Credit Clear, its AI technology also made the collection time 67% faster while also improving customer experience.
Payments on the digital platform have risen 55%, with new records being hit on a monthly basis for the past four months.
Credit Clear closed out FY2022 with 696 active clients – up 188% year-on-year.
There are also 831,000 active customer accounts, which is 127% higher than FY2021, and $63 million in committed payment plans.
Outlook
Mr Smith said Credit Clear has positioned itself to benefit from many global trends.
“The investment over many years into technology has resulted in capabilities, such as AI and adaptive workflows, that goes beyond what our largest clients could develop themselves, or source from other providers.”
“With companies less likely or able to sell debt, our positioning as an end-to-end digital first provider allows clients to integrate deeply and work with us through the entire collections lifecycle.”
Mr Smith said that the company’s expansion into new markets is progressing with many “exciting opportunities” currently being pursued.
“Importantly, our technology is being received in international markets with the same enthusiasm as we’ve seen in Australia,” he added.