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AppsVillage (ASX:APV) - CEO, Max Bluvband
CEO, Max Bluvband
Source: The Market Herald
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  • Newly-listed AppsVillage Australia (APV) has once again beaten expectations and upgraded its March quarter guidance
  • The app-building and advertising company expects to have almost tripled monthly recurring revenue and its number of paying customers by the end of March compared to the first quarter of 2019
  • Since listing in August, AppsVillage has smashed its revenue guidance for every full quarter
  • The company says the unexpected growth comes from the international roll-out of its services
  • AppsVillage shares are outperforming the market today, currently up just over eight per cent and worth 20 cents each

Once again, newly-listed AppsVillage Australia (APV) has smashed expectations and upgraded its guidance for the first quarter of 2020.

Compared to this time last year, AppsVillage expects all key performance indicators for the business to have more than tripled for the March 2020 quarter. The app-building and advertising specialist highlighted three main areas of company performance which have seen hefty growth: monthly recurring revenues (MRR), annual recurring revenues (ARR), and the company’s number of paying customers.

AppsVillage said it predicts to pull in $145,000 in MRR as at the end of March 2020, which is 30 per cent more than the quarter before and 270 per cent more than the same time in 2019.

As for ARR, AppsVillage is expecting over $4 million by the end of 2020, up 200 per cent compared to the year before.

Finally, AppsVillage said it expects over 8300 paying small-to-medium-business (SMB) customers by the end of March — up 270 per cent compared to the first quarter of 2019.

The company only listed on the ASX in August 2019 and has beaten its guidance for every full quarter since. The business targets SMBs by giving them the ability to quickly and easily design, build, and launch a mobile app. Since listing, the AppsVillage has branched into advertising and fintech markets.

The company said today its unexpected growth comes from the roll-out of AppsVillage services into international markets including India, Malaysia, the Philippines, and several African countries,

Of course, with the continued beating of company guidance, shareholders might be wondering if the company is reporting expectations a bit too far on the conservative side. Nevertheless, AppsVillage admitted in its August prospectus that initial guidance would be unreliable.

Being such a young business, AppsVillage management explained that several factors outside of company control can impact revenue, making forecasts uncertain.

“The Directors find that the company is unable to provide potential investors with reliable revenue, profit or cash flow projections or forecasts — other than having sufficient working capital based on estimated expenditures for a 24-month period, with only minimal existing revenues,” the prospectus said.

Nevertheless, with roughly $370,000 in operating revenue over the December 2019 quarter being outweighed by $1.5 million in spending, the company will need to continue this strong growth trajectory to become profitable. AppsVillage had roughly $3.8 million cash on hand at the end of December.

Still, investors seem pleased with the upgraded guidance. AppsVillage shares are trading 8.11 per cent up in early afternoon trade despite a despondent day on the ASX. Currently, AppsVillage shares are worth 20 cents each in a $15.33 million market cap.

APV by the numbers
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