The Readytech Holdings Ltd (ASX: RDY) share price has stepped into the green during morning trade and is now trading 1.5% higher at $3.38.
Earlier, it was doing even better at $3.55, which is a new 52-week high for the people management software provider.
There's no market-sensitive news out of the company today. Nonetheless, the shares have exploded from a previous low of $2.53 on 23 August.
Let's take a closer look at what's behind this momentum.
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What's fuelling this growth?
The Readytech share price has been on the move ever since the company reported its FY21 earnings late last month.
In its report, the company recognised a 27% increase in revenue to $50 million. A key takeaway was its 45% net profit after tax (NPAT) gain to $2.1 million. Impressively, 87% of its revenue came from subscription contracts in FY21 and revenue retention was 96%.
It also saw an almost $7,000 increase in average revenue per customer to $35,000 for the year, coupled with an 11% increase in marketing spend.
Let's not forget the company's acquisition of software business Open Office back in May on an $80 million valuation.
On this positive backdrop, Readytech forecasts revenue growth in the mid-teens and an EBITDA margin of 36%-38% in FY22. Longer-term, it hopes to generate $125 million in revenue by FY26, which is a cumulative 150% increase on FY21.
Investors appear to have bought in on Readytech's growth narrative. They have bumped the Readytech share price 40% higher since its earnings release. In the first 5 days after its announcement, the Readytech share price climbed 25%.
This appears to be the main tailwind behind the company's shares over the past few weeks.
Readytech share price snapshot
The Readytech share price has climbed 61% this year to date and 86% over the past 12 months.
Readytech shares are up another 9% in the past week alone.
It is outpacing the S&P/ASX 200 index (ASX: XJO) which has risen about 25% over the past year.
