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Nitro sales set to gain as shares surge despite Covid-19

ASX-listed Nitro has seen its share price rise about 90% since January this year, according to Rhys Brock, writing for investor website The Motley Fool.

“In fact, savvy investors who picked up shares at the height of the Covid-19 panic selling would now be sitting on gains of almost 300%,” Brock wrote in a Fool update on 12 October.

Despite Covid-19 causing some disruption to its sales pipeline and a “minor blip” during the March coronavirus sell-off, Nitro still managed to deliver above its prospectus forecasts across most financial metrics for the half year ended 30 June 2020, Brock said.

“Total revenue was up 14% against the June half 2019 to $19.1 million, driven by a 60% increase in subscription revenue. Annual recurring revenue jumped 57% to $20.2 million, and the company reaffirmed its prospectus guidance for full year 2020 total revenue of at least $40.5 million,” reported Brock.

Nitro’s market capitalisation has almost doubled to AUD 570 million in 2020 so far, and the shares could yet enjoy increased demand, according to Fool analysis.

Nitro software is aimed at helping individuals and businesses to streamline and digitise document workflows, including creating, editing, signing and storing documents in the cloud, reducing the need for hard printed copies.

According to Brock, Nitro already boasts some 68% of Fortune 500 companies among its customers.

“The shift towards remote working arrangements for many large companies may play in Nitro’s favour. These companies will now be forced to digitise outdated workflows and cut operating costs,” he adds.

Indeed, that’s what Nitro is counting on. This year it made its e-signature solution free, increasing take-up through the transition to remote working.

Mid-year saw the vendor take on Maria Robinson as global marketing chief, based in San Francisco, USA.

In an interview with CMO Australia, Robinson explained that her previous experience with distributed teams has encouraged her to focus on communication — even “overcommunication” — to help counter disadvantages of a virtualised team environment.

“Coming into Nitro, I thought about what the key things are we need to build relationships and partnerships. Number one was overcommunicate and with more people than you normally would,” Robinson was quoted as saying.

“I used a process I call the ‘no fly zone’, where I conduct interviews with cross-functional colleagues asking the same five questions. Usually I would do about 15 – at Nitro I’ve done 38.

“It’s important to build relationships, gain information and get a 360-degree view of the business before making decisions.”

Nitro in August released survey results on the future of work, finding demand for printing had been declining worldwide, which underlines the need to for organisations to adjust their workflows to handle digitised documentation and online teams while maintaining due diligence and compliance.

Only 39% of workers in the survey indicated their document workflows were more or less up to date; 95% saw room for improvement in document handling practices; and 73% said they would like to work from home more often after the pandemic.

These trends are pushing IT firms and their partner ecosystems to evolve beyond the “traditional B2B approach of high-touch and in-person” communications, noted Robinson in the interview.

“There is a groundswell around e-signatures, for example, and they can’t wait for the office of the CIO to give them this capability. They have to get documents immediately signed and pushed through the business. Slack and Atlassian created that groundswell at a user level and we’re ripe for that right now,” she told CMO.

Download the full Nitro report here.

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