One of the best performers on the local market on Wednesday has been the Catapult Group International Ltd (ASX: CAT) share price.
The sports analytics and wearables company's shares rocketed 21% to $1.19 this morning.
Why are Catapult's shares rocketing higher?
This morning Catapult released an update on its first quarter performance and provided guidance for the full year.
According to the release, the company has had a solid start to FY 2019 and has seen group cash receipts from customers rise 25% on the prior corresponding period to $34.7 million.
The solid quarterly performance was driven by strong growth in its Elite Wearables segment, which saw revenue grow 51% on the prior corresponding period thanks to unit sales of 1,729.
The signing of major customers including the French Football Federation, Real Madrid, and the Football Association of Wales also boosted revenues.
In addition to that, management reported that its Prosumer offering has started well and has gained positive reviews in a number of industry magazines. It also signed a partnership with Fuse Soccer for its use at the Universal Orlando Resorts in association with Celtic FC and New Balance.
What about FY 2019?
Looking ahead to the full year, management expects revenue of between $86 million and $88 million in FY 2019. This implies growth of between 17% and 20% on FY 2018's result. It has also forecast similarly solid growth in its annualised recurring revenues.
Underlying core EBITDA is expected to be between 37% and 63% higher year on year to between $11 million and $13 million.
Looking even further ahead, the company confirmed that it is on track to generate positive cash flow by FY 2021.
Should you invest?
I thought this was a positive quarter for Catapult. However, it is traditionally the company's strongest quarter by some distance, so it may be a little soon to get overly excited.
But it is admittedly a step in the right direction for the company and a few more quarters like this might have me considering an investment. But for now, Catapult remains on my watchlist.
In the meantime, small cap tech shares such as Citadel Group Ltd (ASX: CGL), ELMO Software Ltd (ASX: ELO), and Megaport Ltd (ASX: MP1) may be better options for investors.
