Accounting software provider Reckon has announced a 1.8 per cent drop in revenue to $39.2 million for the six months to June 2019.
Its net profit after tax grew by 2.1 per cent to $5.3 million.
The drop in revenue follows on from its 2018 full-year results, which saw revenue decline by 6 per cent to $75.4 million.
Despite the drop, cloud users increased by 21 per cent to 62,000, with new adds for the first half of 2019 more than double compared to the second half of 2018.
As a result, more than 46 per cent of Reckon’s revenue for its Business Group is now generated through cloud services.
Driven by the ATO’s introduction of Single Touch Payroll, an additional 19,000 users have adopted Reckon’s payroll app launched in May 2019.
Its Accountants Group still showed signs of the aborted sale to MYOB in 2018, but has stabilised with new subscription revenue showing signs of improvement.
Reckon APS saw a slight increase to 83,000 customers, with the software provider boasting the retention of its APS product at the product of choice for seven of the top 10 accounting firms.
Reckon’s legal group performed strongly in the period, with revenue up by 11 per cent and EBITDA by 105 per cent, with the business pivoting from an upfront sales model to a subscription model.
“We are excited by our future growth opportunities. Our new payroll app launched on mobile in the first half of this year, to great success. Our subscription model and focus on cloud in 2019 has also put us in a solid position, reinforcing our ability to deliver solutions to SMB customers as well as the top accounting and legal firms in the world,” said Reckon chief executive Sam Allert.
“We have experienced an exciting six months and, with a clear strategy in place, are continuing solid execution across the group. With rapid advancements in our industry and an explosion of cloud technology, we have remained competitive with the development of new products to support our customers. Our strategy is proving effective as we respond to growing customer demands for smarter services.
“As we continue to refine our full cloud suite and targeted products, we will build upon our solid foundation to drive further growth.”
Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.