UPDATED: Diligent focuses on product use, reaffirms full-year guidance

See also: Diligent revenue increases as cash falls away

UPDATED: Brian Stafford, the new head of Diligent Board Member Services [NZX: DIL], sees "US$3 billion of opportunity" for the NZX-listed governance software firm as it builds on how customers are using the product and targets five sectors to accelerate growth. 

"We have a tremendous runway for growth ahead of us," said Stafford, who joined the company last month, replacing Alex Sodi as chief executive. "Based on our analysis there is more than US$3 billion of opportunity for the Diligent BoardBooks product in the markets we are currently targeting and most of those opportunities are greenfield."

The New York-based company today reported first-quarter adjusted earnings before tax, depreciation and amortisation increased to US$7.73 million in the three months ended March 31, from US$6.4 million a year earlier. Sales rose 19 percent to US$19.1 million, while net income climbed 59 percent to US$3.1 million. 

It affirmed full-year guidance, which forecasts full-year sales growth of up to 19 percent, expecting between US$97 million and US$99 million as it attracts customers to its BoardBooks service, and launches a new product, DiligentTeams in the third quarter.

Stafford said BoardBooks customers are already using the product outside of the boardroom, such as financial services companies using it for bank loan file reviews, healthcare providers using it for doctor patient reviews or firms using it for executive team planning

"This tells me that not only does Diligent have a highly valuable existing product, but that strong demand already exists for us to provide additional solutions to our customers which addresses multiple use cases," Stafford said. "Our new Diligent Teams product is purpose built to better address these expanded use cases and will significantly increase our total addressable market into the US$25 billion collaboration space and enable us to grow faster with our customers."

He said in the US the company was targeting government, education, healthcare, regional banking and asset management sectors as it looked to expand its footprint. 

As at March 31, Diligent had cash and cash equivalents of US$65.2 million, down US$5.6 million from Dec. 31 2014. The drop in cash was down to delays in invoicing as the company switched to a new system, it said.

The company expects second-quarter sales to increase up to 17 percent, to between US$23.6 million and US$23.8 million. 

Shares of Diligent slipped 0.2 percent to $5.69 and have gained 8.4 percent since the start of the year. 

(BusinessDesk)