hipages solidifies market leadership with strong earnings jump and positive cash flow

hipages (ASX: HPG) has confirmed its position as Australia’s number one platform connecting homeowners and tradespeople, increasing its annual EBITDA by 33% and delivering $2.1 million in positive free cash flow.

Releasing its FY24 financial results, hipages highlighted its record marketplace activity and the successful launch of job management solution hipages Tradiecore, with total revenue jumping by 13% to $75.8m and recurring revenue increasing by 15% to $72.1m.

The EBITDA increase to $16.4m drove a 4 percentage point margin increase to 22%, backed by a 3% increase in connections to 2.7 million with a record 86% of all jobs connected.

Inflexion point

Group chief executive officer and co-founder Roby Sharon-Zipser said hipages had achieved an inflexion point with positive free cash flow up $4.9m on the previous corresponding period.

“This is a significant milestone achieved through our unrelenting focus on driving sustainable revenue growth as we maximise the value exchange on the platform and our disciplined approach to both operating costs and investment spending,” Mr Sharon-Zipser said.

“Our strong operating cash flow enabled us to continue investing substantially in optimising our business and building out the platform for the future.”

“FY24 demonstrated hipages’ ability to deliver growth and profitability as we benefit from continuing momentum on our marketplace, which has seen further improvement in our key revenue metrics as we drive operating leverage through disciplined cost management.”

“The value proposition of the hipages online marketplace continues to build in the current uncertain economic environment [and] subscriptions are growing as tradies seek high-quality leads and homeowners are benefiting from strong job connection rates, which now stand at a record 86%.”

Double-digit growth

Mr Sharon-Zipser noted that the company had again achieved double-digit growth in average revenue per user and monthly recurring revenue on the back of continuous improvement in its lead pricing algorithm and the company’s proactive account management capability, which led new and returning tradies to higher subscription packages.

He reported that the brand’s focus for FY25 includes the continued rollout of hipages Tradiecore in Australia, a full-subscription model in New Zealand and new initiatives aimed at enhancing user experience.

“During the second half, we successfully launched our Tradiecore single tradie platform and have a range of exciting upgrades and initiatives planned for FY25.”

“These are expected to further increase our market penetration and better reflect the value of our services to tradies and homeowners.”

Strong balance sheet

hipages’ balance sheet remains strong with no debt and positive net cash flow of $11.6m, which saw cash and funds on deposit increase to $21.3m.

Mr Sharon-Zipser said there is a positive outlook for the home improvement market and opportunities for the business, including tapping into the growing need for specialised job management software.

The group is targeting continued strong revenue growth and further margin expansion, with trading in July exhibiting strong registration momentum coupled with job volumes returning to year-over-year growth.