Craneware has released a very positive update ahead of its FY25 results, highlighting revenue growth of 9% YoY to US$205.7m with even stronger growth of 12% in adjusted EBITDA to over US$65m. The company ended the period with net cash of US$28.2m. Moreover, Annual Recurring Revenue increased 7% to US$184m (2% YoY growth in FY24) and Net Revenue Retention was even more impressive, increasing to 107% (FY24 98%). All of which confirms that the company is really beginning to press the accelerator on delivering the potential from its Trisus platform, its data and its 40% penetration in the US hospital market. These results confirm the company is moving to sustainable, double-digit growth. We raise our prospective revenue growth rates to an average of 10% pa from 7.9%. By FY27 that results in an increase in revenue of 3.1% translating into adjusted EBITDA 7.0% higher at US$78.0m and EPS 10.7% higher at US$1.35/share. Our DCF based valuation increases to 3,313p (from 3,106p), almost 50% above the current share price, and likely helping to explain the lack of interest in Bain's putative offer at £26.50/share.
