SLI shares soar after December search queries top 1 billion
Shares in SLI Systems soared to a six-month high after the online search software developer's service topped 1 billion search queries in December, the first time it crossed that threshold.
The shares rose as high as $2.50, the highest since July last year, and recently traded at $2.45, up 20 percent on the day, after the company said search queries handled for its global retail customers grew 50 percent in December from a year earlier. December is typically the busiest month for search queries on retailers' websites due to the Christmas holiday period.
"As more retailers realise that search and related services can be significant drivers of revenue and traffic, we have enjoyed growth well beyond that of the overall eCommerce industry," chief executive Shaun Ryan said in a statement. "This billion-query milestone reflects not only the growing number of merchants using our services but also adoption by larger retailers with higher traffic volumes."
Ryan told BusinessDesk the number of search queries doesn't directly tie into SLI Systems' revenue, as its larger customers with higher traffic pay a lower rate per query, though it's "definitely a positive indicator."
He's upbeat about the company's prospects for the upcoming year, saying "we continue to see a number of opportunities globally for our services," and said the company has been taking on new staff to take advantage of those.
SLI Systems reported annual sales of $18.3 million in the year ended June 30, 2013, with annualised recurring revenue of $19.3 million, both slightly ahead of expectations, with a smaller net loss than forecast of $2.15 million.
Like other growth-focused tech companies, SLI Systems is forgoing short-term profits to chase global market share.
The company listed on the NZX in May last year, raising $27 million in a public offer and from existing investors to fund its growth aspirations, particularly in Japan and Brazil.
The stock was sold at $1.15 apiece, and has climbed 63 percent since then, valuing the company at $147.1 million.