The share price of Nitro Software Limited (NTO.AX) fell 7% following a $25 million loss.

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Shares of the document solutions software as a service (SaaS) business are presently selling at $1.12 per share, down 7.05% on Friday’s closing price.
NTO reported greater operational expenditures throughout the reporting period. R&D accounted for the greatest growth, increasing 58% year on year.

A considerable depreciation and amortisation (D&A) line item was also recorded by the corporation. NTO’s net loss increased 265% year on year to $US3.3 million ($AU4.81 million).

On the plus side, the company’s ARR and subscription revenue grew at a rapid compound annual growth rate (CAGR). From June 2020 to June 2022, they increased by 54% and 60%, respectively. Another success for the firm was its high-quality profitability, with Fortune 500 companies accounting for 67% of sales.

NTO has expedited its move to subscription income for its business sales channel from FY2017. Subscription revenue jumped from 14% in FY2017 to 90% in 1H2022.
In the first half of 2022, the business also secured a few high-profile clients, including a U.S. insurance provider that added 10,000 users to the platform. In 2017, another Fortune 100 customer ordered 9,000 NTO PDF licenses.

The global spend on e-signing is expected to rise at a CAGR of 9% over the next decade and 44% through 2025. According to the business, this will be aided by an increase in signatures for high-value transactions as customers heighten their demands for a trusted solution.

NTO plans to be cash flow positive by the second half of 2023. In terms of forecast, the business anticipates a US$10-$13 million ($AU14.57-18.94 million) loss for the remainder of the year, with ARR decreasing between US$57-60 million ($AU83.05-87.43 million).

NTO’s share price has fallen 54% year to date. Its losses have been significantly larger than those of the broader market, with the S&P/ASX 200 Index (ASX: XJO) down around 7% during the same time period.

The current market valuation of the firm is about $276 million.

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