Company DescriptionReckon Limited provides software solutions in Australia, the United States, and internationally. The company operates through three divisions: Business Group; Practice Management Group, Accountants; and Practice Management Group, Legal. It offers Reckon One, an online accounting software for small businesses; Single Touch Payroll software for managing pay runs, allowances, leave, and superannuation; Reckon Accounts Hosted, an online accounting software to manage finances, payroll, and inventory for large businesses; Reckon Cloud POS, a cloud-based point of sale software; and Better Clinics, an online practice management software for allied health professionals. The company also provides Reckon Loans, which offers business loans; Reckon Accounts Desktop, a desktop accounting software for businesses; Desktop Point of Sale software; personal finance software; Reckon APS, an accounting practice management software; and Reckon Elite, a small and medium firms practice management software. In addition, it delivers digitalization, practice management, and cost recovery and analytics solutions under the nQ Zebraworks brand primarily to the law firms, and government and corporate legal departments. The company was incorporated in 1987 and is based in North Sydney, Australia.

How the Company Makes Money

Reckon Limited Financial Statement Overview

Summary

Overall, Reckon Limited demonstrates solid financial health with strong revenue growth, operational efficiency, and robust cash flow generation. Despite a decline in net profit margin and ROE, the company maintains a healthy balance sheet with moderate leverage and solid equity. The software industry positioning supports its growth trajectory, though it should focus on improving net income to enhance profitability further.

Income Statement

Positive

Reckon Limited demonstrates a positive revenue growth trend with a 1.32% increase from 2023 to 2024. The gross profit margin improved significantly, reaching 50.92% in 2024. However, net profit margin decreased to 8.17% in 2024 due to a lower net income. EBIT and EBITDA margins are healthy at 16.95% and 9.15% respectively, showcasing operational efficiency.

Balance Sheet

Positive

The company maintains a manageable debt-to-equity ratio of 0.31, indicating moderate leverage. The equity ratio stands at 47.95%, reflecting a solid equity base. However, return on equity (ROE) declined to 19.87% in 2024, suggesting reduced profitability on shareholders' investments.

Cash Flow

Positive

Reckon Limited exhibits strong cash flow management with a significant free cash flow of 17.53 million and a remarkable free cash flow growth rate of 280.63% from 2023 to 2024. The operating cash flow to net income ratio is robust at 4.05, indicating efficient conversion of income into cash.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
54.04M	53.41M	51.23M	49.52M	65.42M
	Gross Profit
27.48M	13.50M	13.50M	13.87M	15.19M
	EBIT
4.46M	5.34M	5.30M	6.23M	5.62M
	EBITDA
20.19M	19.70M	17.96M	17.26M	29.74M
	Net Income Common Stockholders
4.42M	5.57M	7.31M	9.82M	9.74M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
986.00K	975.00K	1.23M	1.39M	1.13M
	Total Assets
46.40M	41.21M	39.94M	71.87M	83.04M
	Total Debt
6.96M	5.20M	6.49M	21.14M	38.41M
	Net Debt
5.98M	4.23M	5.26M	19.75M	37.27M
	Total Liabilities
23.78M	21.58M	22.03M	40.05M	57.66M
	Stockholders Equity
22.25M	19.57M	17.14M	30.53M	25.38M
Cash Flow		Free Cash Flow
17.53M	4.61M	7.47M	10.05M	12.42M
	Operating Cash Flow
17.89M	19.13M	7.69M	10.79M	12.91M
	Investing Cash Flow
-14.82M	-15.29M	78.17M	12.90M	568.00K
	Financing Cash Flow
-3.08M	-4.11M	-85.93M	-23.46M	-13.46M

Reckon Limited Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UVW		€32.31M	9.83	21.21%	6.51%	―	―
Sector *	62 Neutral	$11.81B	10.34	-7.44%	2.91%	7.41%	-7.93%
NXDCF		$5.48B	―	-2.06%	―	―	―
RW8		€7.93B	95.32	37.44%	0.62%	―	―
WTCHF		$22.86B	115.83	13.73%	0.18%	―	―
XROLF		$18.87B	139.68	12.98%	―	―	―

* Technology Sector Average

Performance Comparison

DE:UVW

Reckon Limited

0.23

-0.05

-17.86%

NXDCF

Nextdc Limited

8.64

-1.00

-10.37%

DE:RW8

Technology One Limited

23.60

12.68

116.12%

WTCHF

Wisetech Global

69.19

3.20

4.85%

XROLF

Xero Limited

123.79

39.47

46.81%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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