Esker - Favouring growth over short-term margin boost

Esker reported 19% y-o-y revenue growth for FY21, with 21% growth in operating profit and 20% growth in normalised diluted EPS. Profitability was below our expectations due to factors including higher sales commissions than expected, related to strong order intake, wage inflation and share-based payment-related taxes. The company continues to favour investment in sustained revenue growth over margin expansion and we have revised our forecasts to reflect a higher level of investment in FY22 and FY23, albeit within the company’s target margin range of 12–15%.