Join our daily newsletter At The Bell to receive exclusive market insights
- App-building specialist AppsVillage (APV) has once more beaten its quarterly guidance
- Even after upgrading its revenue guidance in February, AppsVillage beat monthly and annual recurring revenue expectations by roughly four per cent
- The increased revenue comes despite the bleak economic climate brought about by the COVID-19 pandemic
- Still, the company’s annual report yesterday highlighted an $8.2 million loss from January to December 2019
- With just over $4 million cash on the hand, investors might be concerned about the company’s cash position moving forward
- Today, AppsVillage shares are sitting grey at 18 cents per share
In what’s become a frequent announcement for AppsVillage (APV), the company has once more beaten its revenue guidance for the latest quarter.
The app-building specialist company has beaten its guidance every quarter since listing on the ASX in August 2019.
Today’s news comes after the company’s earnings guidance was upgraded in late February on the back of a surge in paying customers.
A win’s a win
Today, the company told shareholders this upgraded guidance for the March quarter of 2020 was beaten even as listed companies withdraw guidances across the ASX in the height of the COVID-19 pandemic.
Of course, when reviewing the AppsVillage figures, the difference between expected revenue and actual revenue is marginal.
For monthly recurring revenue (MRR), AppsVillage predicted an average of $145,465 over the March 2020 quarter. Actual MRR was $151,752.
Similarly, for annual recurring revenue (ARR), AppsVillage predicted $1,745,580. The actual ARR figure for the end of the March quarter was $1,821,024.
In each case, the guidance was beaten by roughly four per cent.
Nevertheless, the increase in MRR and ARR represents roughly 250 per cent growth compared to the same quarter in 2019. Further, these figures represent a 36 per cent increase on the previous quarter.
Health in the midst of the pandemic
As the coronavirus continues to tear through economies around the globe, any increase in revenue is worth celebrating, especially for companies outside of the health care sector.
AppsVillage Founder and CEO Max Bluvband said the services the company offers are proving to be important for small and medium businesses (SMBs) in the current economic climate.
“The COVID-19 outbreak is having an unprecedented impact globally. These are trialling times for all humanity and particularly for small businesses,” Max said.
“Our platform is proving to be essential to SMBs continuous operation and sustainability and our financial results reflect that,” he continued.
AppsVillage helps SMBs design, build, and launch their own mobile apps without the need for any in-depth code writing or digital marketing knowledge. Through the platform, SMB customers can advertise directly to key markets and even take out small business loans.
As the world makes a temporary switch to online living wherever possible, businesses are forced to maintain their customer base through online services and mobile apps.
Rapid cash burn
However, while the company is happy to tout its increases in revenue, investors may be more interested in the company’s cash position at this point in time.
While revenue is increasing, AppsVillage’s annual report yesterday highlighted a US$5 million (A$8.2 million) loss for January to December 2019.
The company spent more than eight times what it earned over the year. With US$2.66 million (A$4.38 million) cash on hand at the end of December, shareholders might be more interested in how much cash is left in the AppsVillage bank than how much revenue it pulled in.
As such, AppsVillage shares are sitting grey in early afternoon trade. Currently, shares are worth 18 cents each in a $13.8 million market cap.
