Aptitude Software (APTD) Shares Fell 4% on FY Results, Rising Profits

The Aptitude Software Group PLC (LON: APTD) share price fell 4% after releasing its full-year trading update to 31 December 2023. In 2023, Aptitude achieved profitable outcomes aligning with expectations. The year was marked by new business wins, notably a central Japanese bank, and significant advancements with Fynapse, its pioneering digital finance platform. 

Fynapse's milestones included integration with Microsoft D365 and Azure cloud platform, successful client implementations, growing interest from existing clients, and a new multi-year subscription agreement in December 2023.

Moreover, Aptitude secured several critical clients in the latter half of 2023, including a U.S. investment management firm, the leading Japanese bank for European operations, and other significant agreements. 

This success contributed to a modest 2% increase in Annual Recurring Revenue (ARR) to £51.1 million despite elevated churn in specific products due to macroeconomic factors. However, finance transformation products like AAH and Fynapse saw a 12% growth in ARR.

The Board, acknowledging the interim results, undertook cost-reduction measures in the first half of 2023 to bolster profits and efficiency. Strategic investments, particularly in Fynapse, were maintained. As of 31 December 2023, Aptitude reported a robust balance sheet with £34.1 million in cash and £22.7 million in net funds.

CEO Alex Curran has restructured the senior leadership to enhance revenue growth, curb churn, fortify partnerships, and boost overall performance.

Looking forward, Fynapse presents a significant opportunity, with the Board optimistic about its potential in 2024 and beyond. The focus remains on driving ARR growth, reducing churn, and enhancing margins, supported by a strong partnership network and an initial £53.2 million revenue under contract for the year.

The Board will cautiously manage investments while prioritising strategic spending on Fynapse. Despite potential churn impacts, improved ARR growth and profit expectations are anticipated for 2024. In the long term, Fynapse is regarded as a critical growth driver for Aptitude, with confidence in expanding sales to new and existing clients in the coming year.

Aptitude Software (APTD) share price. 

The Aptitude Software (APTD) share price fell 4.01% to trade at 299.50p from Friday’s closing price of 312.00p.