News that recurring revenues have delivered a record quarter for Rent.com.au Ltd (ASX: RNT) sent the company's shares almost 20% higher in early trade.
The company said that it had posted record quarterly revenue of more than $1 million for the first time in the three months to the end of December, up 34% on the same quarter last year.
Long-term revenue
The company said increasing recurring revenues from its RentBond and RentPay products was driving the growth, with 67% of revenues coming from recurring sources.
Rent.com.au Chief Executive Officer Jan Ferreira said it was a solid quarter.
Exceeding $1 million in quarterly revenue for the first time is an important milestone for the Group. Achieving this result in a quarter that has historically been seasonally softer is exciting because it highlights the strength of Rent.com.au's evolving business model which prioritises customer solutions that have strong recurring revenue streams. With a well-capitalised balance sheet, the group remains on track to achieve cashflow positivity by the end of 2026.
Rent.com.au has two main products, one of which is RentBond, which is a "move now pay later" product designed to cover rental costs such as bond payments, rent in advance, and moving expenses.
The company's other product is RentPay, which is a "digital rent payment and money management app that offers renters greater control and flexibility while streamlining workflows for agents''.
Building on growth
In a trading update in December, the company said annuity revenue from RentBond was running at more than $100,000 in a month for the first time, "demonstrating accelerating product uptake and recurring revenue growth''.
Mr Ferreira said at the time that demand for new RentBond loans "continues to be very strong, highlighting the growing value of our offering for renters''.
He went on to say:
As our annuity revenue builds, seasonality is becoming far less relevant to our performance, giving us greater confidence in our ability to scale consistently throughout the year.
The company said on Tuesday it was well-capitalised, with $7.5 million in cash and $5 million in undrawn debt at the end of December.
Shares in the company were trading at 5.1 cents by noon, up 6.3%, after earlier trading as high as 5.7 cents, up 18.8%.
The shares have almost quadrupled over the past year from lows of 1.5 cents.
The company last year posted a net loss of $3.69 million on revenue of $3.34 million.
The company was worth $55.7 million at the close of trade on Monday.
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