Catapult Group International, a leading sports-technology provider, has reported positive free cash flow for the first time in three years. The company’s CEO, Will Lopes, is optimistic about the future, expecting the profit margin on new revenues to continue expanding in the near term.
For the first half of the fiscal year ending on September 30, Catapult Group International reported $1.4 million in free cash flow. This positive result has allowed the company to decrease its fixed costs as a percentage of revenue, resulting in an incremental profit margin of 19%. Lopes believes that this trend will continue, with Catapult aiming to achieve a 30% incremental profit margin by the end of the second half.
Lopes expressed his excitement about reaching this “inflection point,” stating that every additional revenue generated from now on will yield a significantly higher profit margin. The company’s revenue has already shown promising growth, increasing by 16% compared to the previous six months and by 20% over the same period last year, reaching $49.8 million. This growth can be attributed to the expansion of Catapult’s user base for performance-tracking devices and upselling additional services, such as video analysis, to existing customers.
Catapult’s impressive client portfolio includes prominent sports franchises such as English Premier League soccer clubs, NFL teams, and NBA franchises. In addition to growing its customer base, Catapult also raises prices on contract renewals, typically by around 10% after the initial three-year period.
The positive financial results have had a direct impact on the company’s financial performance. Catapult has managed to narrow its statutory half-year loss from $22.6 million to $8.4 million compared to the same period last year. As a result, Lopes announced that the company plans to conserve cash throughout the fiscal year 2025 by limiting investments in research and development.
Catapult Group International is confident in its ability to continue its growth trajectory while maintaining healthy profit margins. With a solid product lineup and an expanding market, the company is well-positioned for future success.