Ann: FY23 Results Presentation, page-5

Catapult Sport chief executive Will Lopes says he is confident the software business will reverse its fortunes next year to turn free cashflow positive and post revenue growth.

Catapult, which provides wearable sports technologies to the world’s leading professional sports teams and athletes, narrowed its net loss slightly to $US31.5 million ($47.3 million) on foreign exchange adjusted sales up 14 per cent to $US84.4 million for the financial year to March 31.

AFL teams such as St Kilda use Catapult for tracking athletes.

Shares are down 36 per cent over the past year amid a sell-off in unprofitable tech stocks, but Mr Lopes insists a half-year of focused cost reductions leaves it positioned to grow profitably.

“We reduced expenses significantly in the second half while maintaining growth around 22 per cent in our SaaS [software-as-a-service] business,” Mr Lopes said.

“Our growth strategy is now working incredibly well, annual contract sales of wearables are up 28 per cent in the past year, and the new solutions in video we’ve delivered 27.5 per cent growth.”

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Total fixed and variable costs fell by $US11.9 million from the first half to the second half of the financial year as the business lifted its gross profit margin from 71 per cent to 81 per cent over the full year. Operating cashflow climbed 40 per cent to $US3.7 million for the full year.

As at March 31, the start-up spun out of the Australian Institute of Sport and Co-operative Research Centres in 2006 had about 3800 professional sports team clients across 40 sports in more than 100 countries, including blue-chip names such as McLaren Racing, the All Blacks, Cricket Australia, Real Madrid, the New York Knicks and soccer World Cup winners Argentina.

“There are still about 20,000 teams across the globe [to get],” Mr Lopes said. “So there’s quite a bit of top-line growth for us and that can come at a 30 per cent profit margin.

“We’re well on track for free cashflow positive given the drop in costs and growth in SaaS [software as a service]. The growth strategy of starting with wearables and expanding with video is working incredibly well.”

Mr Lopes rejected persistent speculation that Catapult will need to raise capital, adding that it was too early to think of potential dividends or other capital returns to investors if the business turns free cashflow positive.

“Eventually, we’ll have a review of where any of those dollars get reinvested,” he said. “Whether it’s back to shareholders or areas of future growth remains to be seen.”