SLI Systems Grows Operating Revenue for First Half 30% Year-on-Year
Operating revenue up to $17.4 million for half and ARR rises to $35.6 million
CHRISTCHURCH, New Zealand – February 26, 2016 – SLI Systems (SLI.NZ) today announced that it has extended its growth track record for the first half of its financial year and has remained cashflow neutral over the six month period. The company’s operating revenue for the six months to 31 December increased to $17.4 million, up 30% from $13.3 million in the six months to 31 December 2014 and in line with expectations. Cash on hand ended the half at $5.6 million, in line with the company’s position six months earlier and supporting the company’s plan to achieve breakeven status without requiring additional investment.
In the 12 months to 31 December 2015 Annual Recurring Revenue (ARR)1, a key measure of the company’s ongoing success and a strong indicator of expected future performance, increased 23%2 to $35.6 million – up from $28.9 million as at 31 December 2014. This growth was aided by the improved strength of the U.S. dollar and the British pound against the New Zealand dollar. On a constant currency basis ARR increased 10% during the same time period. Gross margin increased to 76.4% from 74.7% one year earlier. For the first half the company posted a loss of $0.5 million, as compared to a loss of $4.1 million in the six months to December 31 2014.
- 30% year-on-year operating revenue growth
- $5.6 million cash on hand, in line with June 2015 position
- $35.6 million Annual Recurring Revenue, 23% increase year-on-year
- 76.4% gross margin, up from 74.7% in the six month period to 31 December 2014
- $0.5 million loss for the 6 month period versus $4.1 million loss one year earlier
First Half FY 16 Commentary
In an effort to accelerate revenue and ARR growth the company has made important changes to its executive leadership team. Most significantly, in October the company named long time enterprise software industry veteran Chris Brennan to the CEO position. Mr Brennan was also named Executive Director. Founding CEO Shaun Ryan took on the role of Chief Innovation Officer and retains his seat on the Board of Directors.
Mr Brennan brings more than 30 years’ experience to SLI, including CEO positions at six prior Silicon Valley companies. He has led the creation of more than US$2 billion in shareholder value.
“Chris has a mandate to drive top-line revenue growth and achieve profitability for the company,” stated SLI Chairman Greg Cross. “To do so he will focus on improving performance of the sales and marketing functions, increasing customer retention and releasing innovative products to raise sales for online stores.”
“The Board of Directors and I are aligned in our opinion that SLI can and should achieve materially higher growth rates than we have experienced in the recent past,” Mr Brennan said. “We are a vital component of a multi-trillion dollar global market that is characterized by strong growth and is driven by a number of global trends that we expect to support growth well into the future.”
According to projections from research firm eMarketer the e-commerce industry will achieve 17% CAGR from 2014 to 2018,3 achieving the $3.5 trillion mark in annual revenue by 2019 and representing 12.4% of global retail sales.4
Mr Brennan added, “Our first task is to increase the rate at which we add recurring revenue to our business while maintaining existing revenue streams more effectively. We already have identified and undertaken initiatives that we believe are central to these objectives and we are optimistic these changes will result in predictable, reliable and repeatable performance.”
The company in recent months has added two additional key members to its executive staff, Chief Revenue Officer Martin Onofrio and Vice President of Customer Success Gary Schaumberg. These executives each bring more than 25 years’ experience to the role. Both Martin and Gary will focus on operating excellence in areas of the business that drive ARR, either by increasing new customer and add-on sales or by improving customer retention.
In the prior six months SLI released a series of innovative product enhancements to provide additional value to customers and improve its competitiveness in the market. These enhancements include:
- Expanded and improved capabilities for the company’s popular Rich Auto Complete product
- A new merchandising dashboard to help customers monitor and manage their e-commerce businesses
- Spanish language support for the SLI merchandising console
- Extension support for version 2 of the popular Magento e-commerce platform
- Many improvements to existing products’ features, search engine optimization and language support
Mr Brennan said, “We remain focused on innovation as a core principle of the organization. Delivering the best technology enables our solutions to better improve sales on e-commerce sites, and this is the key to our ability to build and retain our customer base.”
About SLI Systems
SLI Systems (SLI.NZ) enables the world’s leading e-commerce retailers to accelerate sales by connecting shoppers with the products they’re most likely to buy. With offerings that include site search, navigation, merchandising, mobile, product recommendations and user-generated SEO, SLI is the most chosen cloud-based site search provider to U.S. Internet Retailer Top 1,000 retailers. The company’s patented technology continuously learns from the actions of visitors to deliver the most relevant results possible. Whether via PC, tablet or phone, a site powered by SLI delivers the kind of satisfying search experience that increases conversion rates, secures brand loyalty and results in higher order values. SLI operates on five continents. For more information, visit uscorporatesli.wpengine.com.