Asset finance software company Alfa Financial Software has said it expects full-year revenue to be £1m ahead of previous expectations, as the shift to a subscription model has started to pay off.
In the first half of 2024, the company posted record total contract value (TCV) of £193m, a 40 per cent year on year jump, driven by growth in subscription revenue.
Alfa reported an 18 per cent growth in subscription revenue compared to the first six months of 2023 as its transition to a software-as-a-service (SaaS) subscription model gained speed.
As a result, full-year revenue is expected to beat forecasts after revenue at the start of the second half is tracking ahead of previous expectations, the FTSE 250 firm said on Thursday.
The company’s software platform helps businesses manage retail and corporate operations, including contract management.
“The transition to a SaaS subscription business is well underway,” said Alfa chief Andrew Denton, “and is leading to strong growth in high quality subscription revenues, resulting in increased revenue visibility and customer stickiness.”
He continued: “Alfa is the go-to market leader in North American automotive finance software. We also have our first customer for the Total Originations product line which significantly expands the size of our addressable market.
“This demonstrates our ability to go deep into specific markets, gaining momentum as we win class leading customers. Consistent growth and delivery over the last five years shows that we have the right strategy and we are confident in the outlook for the business,” Denton added.
Total revenue fell one per cent year on year to £52.3m, while pre-tax profit dropped three per cent to £16.1m.