Australia-based job search site AD1 Holdings (AD1:AU) reported cash receipts totalling AUD 1.85 million (USD 1.18 million) in the first quarter ended 30 September 2023, representing an increase of 27% compared to Q1 2022.

In its Q1 business update, AD1 Holdings said it continued to see steady revenue growth across the group while driving operating costs down, albeit some one-off costs were embedded within the quarter to achieve the annualised savings.

Art of Mentoring and ApplyDirect have seen new customer wins and existing revenue enhancement with existing customers expanding functionality and use of the solutions through a revised sales and account management approach.

Art of Mentoring, which provides software to manage organization mentoring programmes, has seen significant activity in both the Australian and North American geographies. The business has grown revenue 21% year-on-year and drove gross profit up by 10%. The group has seen strong contract renewals with some contract wins within targeted verticals within the business.

Strong growth within the Australian market has seen robust renewals with its largest clients re-signing and also achieving AUD 240,000 (USD 152,793) of new client revenue. The new account management structure is engaging 4-5 months out from contract renewal to discuss new contracts which has seen several clients re-sign well in advance of contract anniversary.

The US division of Art of Mentoring has seen a strong pipeline with over AUD 500,000 (USD 318,320) worth of deals that are being actively worked and some close to being closed. AD1 expect, as the US team embed themselves into the solution, that many more opportunities will present. It is currently in discussions with strong strategic partnerships which should position us nicely within the US market.

AD1 Holdings saw significant growth within its ApplyDirect business, achieving 30% revenue growth throughout the quarter, which was planned. It had EBITDA growth of 85% year-on-year which was also planned. The company expects continued growth throughout the FY24 year as its looks to drive profitability and free cash-flow surplus within this business.

AD1 Holdings Chief Executive Officer Todd Perkinson said, “We are pleased to have completed a quarter of significant transformation of the AD1 group. Our continued focus on reviewing and executing on costs controls has seen over AUD 1.9 million (USD 1.2 million) of annualised costs be eradicated from the business whilst we have seen revenue growth from all divisions within the group.”

“The USS transition was completed smoothly during the quarter and all costs have been absorbed within the results that are being presented. With a strong pipeline of targets set for FY24, we are very excited about the new opportunities emerging in Australia and North America.” ‘USS’ refers to Utility Software Services which the company acquired in January 2019.

Whilst cash receipts during the period saw an increase, operating cash used within operating reduced by 31% over the year.

Looking ahead, the group said in FY24, AD1 invested heavily into the organisation design to deliver sustainable revenue growth and operational costs that are in-line with the size of the business. This has seen reductions in annual costs while revenue growth has been achieved successfully.

“Moving into the remaining quarters for FY24, AD1 has shifted into a strong sales and partnership focus, while ensuring that we have deeper relationships with our customers and the right business model to deliver effective outcomes,” the company stated.

The group commenced FY24 with a restructure to its operating model, resulting in clear objectives for staff and alignment to achieving profitability through FY24. With a robust Australian and North American sales pipeline, strong customer retention from ApplyDirect and continued implementation of the cost reduction program, the group’s outlook is positive for the remainder of the FY24 year.

AD1 Holdings shares closed at AUD 0.005 (USD 0.0032), no change on the day and 25.00% above the 52 week low of AUD 0.004 (USD 0.0025) set on 18 October 2023. The company has a market cap of AUD 4.11 million (USD 2.6 million).