GCICrimson Tide reports 30% revenue growth and narrowed loss in 2022
( ), the company behind mpro5, released a trading update ahead of publishing full-year results in early April.
Crimson reported £5.3m of revenues for the year, up 30% year-on-year. Gross margin remained consistent at c. 84%. The company said it expects a smaller than expected EBITDA loss due to "enhanced sales figures and [its] decision to be cautious in marketing spend in the second half."
Year-end cash stood at £3.5m and its annual recurring revenue going into 2023 was £5.8m, compared to £3.8m in 2021. Churn remained below 5%, with no significant contract losses, the company said.
Crimson noted its new One Platform strategy web client for mpro5 was in the rollout phase, with a new mobile client upgrade expected in H1 2023. The company said it successfully implemented its IoT backend infrastructure, with front-end architecture remaining a priority for 2023.
The company said it decided to standardise its product offering in light of increasing demand for enterprise-level mpro5. As a result, it has released its beepro mobile client for "micro and nano businesses" in Q4 of last year, and said it will refocus on targeting 5-10 user companies at a time rather than deal in individual trades, areducing its marketing spend on the micro/nano sector accordingly.
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A positive update from Crimson Tide, summarising a year of progress for the company, with 30% higher revenues, steady gross margin, and a narrowed EBITDA loss despite large-scale deployment of investment capital in growth and marketing. Based on Crimson's long string of new contracts and contract extensions in 2022, we would expect April's full-year audited results to mirror today's release.
Crimson scored significant contract wins in 2022 with new and existing clients, particularly in catering and facilities management. The company noted an "exciting new client in the utility sector" as well as a large contract renewal with a major UK retailer.
Expansion into the US also showed promise, building on the company's relationship with Cisco Meraki. Crimson currently has a pipeline of 20+ opportunities in the US, and a first contract signature is expected in 2023.
The decision to standardise its catalogue and target 5-10 businesses at a time should improve sales efficiency, reduce marketing expenses, and bring the company closer to profitability. Investors and customers should expect a new and more standardised range of products from Crimson in 2023, including the beepro mobile client.
Crimson said it was "well structured and well funded" for future growth, and that its full balance sheet for FY22 will be available in early April - Crimson, so you do not miss that news.
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