Fiscal Year 2023: a year of growth, adaptation and innovation for hipages
As a chartered accountant, I like this time of year, and when strong business results come out, it’s an opportunity to reflect on all our efforts over the last financial year.
The hipages Group FY23 financial results reveal total revenue is up 8% to $67 million, with operating revenue up 9% to $65.9 million. The business is free cash flow positive in H2, with trading momentum supporting our positive free cash flow target for FY24.
The numbers demonstrate our hard work to deliver for our community of 35,000-plus tradies and evolving our business into a high-value tradie business management platform.
FY23 has been a transformative year for hipages, marked by growth, adaptation and innovation.
The financial results reinforce the company’s resilience in challenging times and its capacity to create value for tradies and investors.
With a strong foundation, a commitment to delivering on its strategic promises, and a clear vision for the future, hipages is poised to continue its journey of empowerment and excellence.
hipages navigates economic headwinds and delivers growth in valuable platform connections
At a time of economic uncertainty, hipages stands out with its robust countercyclical model and the ability to navigate a cooling economy while achieving growth in tradie to job connections.
Our H2 performance was strong and hipages witnessed an upsurge in tradie demand. We enjoyed healthy 15% growth in monthly recurring revenue (MRR), and these figures underscore our marketplace’s resilience in challenging times.
In particular, it’s important to highlight the value of connections between tradies and jobs posted on the platform, which is currently at a record high. Growth in connections drives faster lead usage among tradies, generating upgrades to subscription packages. This makes connections a lead indicator for future growth in hipages.
The figures show a substantial 8% rise in connections made between tradies and homeowners, since FY22, which in turn is driving strong growth.
The number of subscriptions has also shown consistent positive growth, with an uplift of 3% that’s seen our community expand to 35,700 tradies.
Growth, even in times of economic softening, supports our efforts to evolve from being a marketplace to an end-to-end platform for tradies, and one that is a strong, sustainable business model.
Business evolution: A platform for tradie success
We are continuing with the strategic evolution from a marketplace to an all-encompassing tradie business management platform that started when we created Tradiecore, our proprietary software-as-a-service (SaaS) solution designed to empower tradies to manage their businesses more effectively.
Throughout FY23, we introduced new functionalities to Tradiecore, which have proven pivotal in helping tradies succeed. Seamless integrations with accounting systems such as Xero, MYOB and QuickBooks, and a payments feature developed in partnership with Stripe, help streamline tradie processes and position hipages as a key facilitator of tradie success.
Our average revenue per user (ARPU) growth has risen 10% over the financial year, confirming that building a comprehensive suite of business tools is a highly valuable service for tradies. These innovations demonstrate our commitment to delivering on the strategic roadmap we have set out and solidifying our position as a trailblazer in the industry.
Looking ahead to FY24 as our biggest year yet
FY24 is an inflection point for hipages Group as we take the next important steps in the strategic evolution where hipages and Tradiecore will be unified into a single app for tradies. This transformation will simplify processes, enhance tradie experiences and lay the groundwork for future growth by strengthening customer loyalty and improving retention.
Our commitment to customer retention is the cornerstone of our forward plans, and with more than 1,000 tradies regularly using Tradiecore to manage their workflows, we have a robust foundation to build upon.
As we fully integrate Tradiecore with our marketplace it will further reduce friction and enhance tradie engagement. As we transition Builderscrack to a subscription model to mitigate cyclicality, we remain committed to our goal of creating enduring value for our stakeholders.
Through this process, hipages Group is poised to redefine the tradie experience, set new industry standards and propel our growth journey even further.
Looking ahead, our marketplace’s strong momentum, combined with our subscription model, provides a solid foundation for continued growth. We project revenue growth in the low teens for FY24, underpinned by our disciplined cost management and operational efficiency strategies. Our ambitious EBITDA margin target of approximately 20% is a testament to our confidence in the path we’re charting.
hipages Group is delivering on the strategy we laid out and pioneering a future where our comprehensive business model helps tradies thrive and this in turn supports investors to reap the rewards.