In a brief trading update, StatPro says that its annualised recurring revenue (ARR) for StatPro Revolution, the cloud-based portfolio analysis service, grew by 81% on a constant currency basis to £14.7m over 12 months. This includes Investor Analytics, which was acquired in January 2016. StatPro launched its Revolution Performance module in September and one of its beta clients, National Australia Bank, has already gone live with eight of its clients on the platform. We are maintaining our forecasts, but given the recent contract momentum and weak sterling, we continue to see upside risk to our forecasts. With StatPro’s US-based financial software peers and SaaS companies trading on lofty multiples, we continue to believe there is significant upside in the shares.
In the 12 months to 30 September 2016, the ARR for StatPro Revolution grew by 81% to £14.7m (September 2015: £8.2m at constant currency). Additionally StatPro has benefited from the fall in sterling as c 85% of its revenues are from outside of the UK, while disproportionate costs are in sterling. We note than Investor Analytics generated c $5m revenues in CY15, of which c 96% was recurring, but StatPro does not break out the figures, as Investor Analytics has been fully integrated. StatPro Revolution as a percentage of group ARR increased to 39%, up from 38% in 30 June and 25% on a constant currency basis as at 30 September 2015.
In September, StatPro launched its new cloud-based performance measurement and data management solution, Revolution Performance. This transaction-based system runs off Amazon cloud and represents the transition of the core component of StatPro’s traditional software platform to the cloud. It enables customers to draw on immense computing power to process data over the cloud, which is a substantial competitive advantage over traditional mainframe systems that rely on fixed processing power. Earlier this year the group announced two new significant contract wins that both included Revolution Performance – one is worth at least £1.2m over five years, with a global American financial institution and the other is a £2.3m three-year contract win with a major Australian financial institution.
StatPro’s stock trades on c 41x our maintained FY16e EPS, which falls to c 30x in FY17e. Alternatively, the shares trade on c 2.1x FY17e EV/sales, one-third of the level of StatPro’s larger US peers, which mostly trade above 5x EV/sales, while US-based pure SaaS companies typically trade in the region of 4.3-7.0x EV/sales.