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Diligent boosts 1Q sales 84 percent amid strong growth outside US

Tuesday 16th April 2013

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Diligent Board Member Services, whose software helps directors manage corporate governance information flows, boosted first quarter sales 84 percent from a year earlier, with rapid growth outside its power base in the US.

Revenue climbed to US$15.1 million in the three months ended March 31 from US$8.2 million a year earlier, with a 2 percent lift in new sales to US$6.6 million, the New York-based company said in a statement. Diligent had a retention rate of 97 percent in the year ended March 31.

The fastest growth came in the Asia/Pacific region, where revenue surged 368 percent to US$1.1 million, followed by Europe, Middle East and Africa, up 127 percent to US$2.7 million. Its revenue in the Americas gained 67 percent to US$11.4 million.

The result "highlights the importance of client retention as a key driver of this consistent revenue growth," the company said. "We believe this is among the best retention rates for companies in the Software-as-a-Service sector like Diligent."

The sales growth comes after Diligent posted a tripling in annual profit last year with annual revenue more than doubling to US$43.7 million.

Diligent added a further US$3.1 million in cash for a balance of some US$36.5 million at the end of the period.

The software company plans to boost investment in research and development this year, and has hired an extra seven R&D staff in the first quarter. A further three people were added to general and administrative staff.

Diligent yesterday announced its new incentive scheme for chief executive Alex Sodi after discovering it had granted him too many options and was forced to backtrack. The new scheme is linked to earnings and revenue growth, and may cost the firm as much as US$6.3 million if Sodi meets all of those targets.

The shares slipped 0.2 percent to $6.35 yesterday, and have gained 16 percent this year.

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