Spirit Technology triples revenue from midmarket, corporate contract wins

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Spirit Technology triples revenue from midmarket, corporate contract wins
Sol Lukatsky (Spirit Technology)

Spirit Technology Solutions has continued its growth momentum as large contract wins and demand for its SMB products have helped its revenue increase three-fold.

In the year ended 30 June 2021, Spirit reported revenue of $104.5 million, up 200 percent from $34.9 million in the previous financial year. Underlying EBITDA also grew at a similar rate of 208 percent, reporting $11.5 million during the period.

Recurring revenue also increased to $27.2 million, up 33 percent from the first half. Spirit also reported sales total contract value for Q4 2021, saying it was a record $31.8 million.

“We continue to execute to strategy with these very strong results. Organic demand for the product set across data, cyber, managed services, voice and importantly Spirit’s bundled offering continues to be very positive,” Spirit managing director Sol Lukatsky said.

“We continue growth momentum with larger contracts in the mid and corporate markets in Q4 FY21 and have also seen strong demand from the SMB segment for our voice and data products with record sales results.”

Lukatsky added that in spite of the growth, Spirit will continue to take “a conservative view” on margins into FY22 as labour costs, IT hardware supply chain challenges and availability of IT and technology (IT&T) skills potentially impact supply side deployments across the entire industry.

Looking ahead into the 2022 financial year, Spirit expects to report revenue between $150 million and $155 million, representing a 44 percent to 48 percent increase. Underlying EBITDA is also predicted to grow to between $19.4 million to $20.2 million, a 68 to 75 percent increase.

The company said the guidance is based on organic demand from its product offerings, balanced with cost pressures from the currently tight labour market and plans to ramp up investment in branding, sales staff and systems. The ongoing COVID-19 lockdowns were also taken into account.

“Spirit continues to execute to strategy and is building a highly valuable IT&T asset for its shareholders and customers,” the company’s announcement read.

“With a very strong balance sheet showing $24.2 million of cash and available debt as at 30 June 2021, growing profits, organic sales increasing and the integration of acquisitions on target. Spirit enters FY22 in a position to take advantage of growth opportunities.”

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