Tear Sheet: Applied Systems Inc.

Applied's revenue increased by about 13% in the first half of fiscal 2024, ending June 30, 2024. The company's three business segments--Subscription and Support, Transaction-based, and Services--grew about 12.5%, 14%, and 22%, respectively. This growth was largely due to price increases, increased demand from its existing customers, and new logo wins. The company sustained S&P Global Ratings-adjusted EBITDA margin in the high-40% range during this period, consistent with the prior year. The company entered into an interest rate swap in the second quarter of 2023, which helped the company improve its S&P Global Ratings-adjusted free operating cash flow (FOCF) generation to about $13 million in the first half of fiscal year 2024--compared to modestly negative FOCF the prior year. The

...October 16, 2024 We expect Applied Systems Inc. will maintain good revenue growth and high EBITDA margin. Applied's revenue increased by about 13% in the first half of fiscal 2024, ending June 30, 2024. The company's three business segments--Subscription and Support, Transaction-based, and Services--grew about 12.5%, 14%, and 22%, respectively. This growth was largely due to price increases, increased demand from its existing customers, and new logo wins. The company sustained S&P Global Ratings-adjusted EBITDA margin in the high-40% range during this period, consistent with the prior year. The company entered into an interest rate swap in the second quarter of 2023, which helped the company improve its S&P Global Ratings-adjusted free operating cash flow (FOCF) generation to about $13 million in the first half of fiscal year 2024-- compared to modestly negative FOCF the prior year. The company benefits from its mission-critical platform and resilient end-market base. Therefore, even in...

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