Microlise has delivered FY22 EBITDA slightly ahead of our forecast £8.0m (we assume £8.1m) and FCF substantially ahead (£5.5m vs. SCMe £3.0m). ARR growth of 10% is in line and we suspect recurring revenue growth is similar. This is despite a shortfall in lower margin hardware revenues of some £2m in H2 as supply chain issues continued to weigh. On the back of a record order book Microlise is confident about the FY23 outlook, if indeed expecting supply chain issues to persist for a few more months before easing in H223. We retain our FY23 forecast ARR and recurring revenues growth of 10% but think it is prudent to pair back hardware revenues. We therefore reduce FY23 revenues by £6m but retain EBITDA & FCF forecasts. Microlise's resilient business model continues to help it navigate the headwinds.
