Key Takaways:

1) 3rd consecutive quarter of positivce cashflow, generting arounf $600k of operating cashflow excl. Grants).

2) Reported record contract wins, adding $1M in ARR , or about 5% in ARR this quarter. 

3) Reported 114% revenue growth year on year, mostly due to acquisitions.   

4) Management anticipate strong demand to continue, so may expect 5% ARR growth per quarter going foward.  Looks to be on track for $19 M revenue, and $2-3 M profit.  

Summing it up, Paygroup have a lost of strong competition, so will really need to do well to accelerate growth.  Growth has mostly come form acquisitions, so look more like a software roll up story rather than an organic growth story.   

However, it does look relatively inexpensive at this valuation. 

Disc - I hold a little

Paygroup has reported the acquisition of Malaysia based TalentOz for consideration of $1.2M (with $0.5M earn out in 12 months).  Acquisition paid for predominantly in script, which is a positive.   The acquisition was on a multipel of 1.7x SAAS revenue, which seems cheap but also sub-scale.  

Talent Oz is highly complimentary, adding additional platrom capabilities, including Learning & development, Performance Management,  career management.  Talent Oz has been growing at a CAGR of 170% over the past 3 years.   

Look out ELMO.