Acquisition Loads Up Catapult

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In its latest acquisition, Catapult Sports has added the missing element to make it a globally competitive sports software company.

-Catapult acquires soccer scouting and recruiting software firm Impect
-Impect product can be expanded to other sports
-Preliminary interim result reflects strong momentum
-Post strong rally, investors expected to scrutinise November market update

By Greg Peel

Originally formed from a partnership between the Australian Institute of Sport and the Cooperative Research Centres to maximise the performance of Australian athletes ahead of the Athens Olympics, Catapult Sports ((CAT)) was officially founded in Melbourne in 2006, and listed on the ASX in 2014.

Initially, Catapult focused on wearables to track an athlete’s performance but has since grown to include technology for sports recruiting and scouting, and video analysis. The company now has over 4600 elite teams as clients globally across more than 128 countries, representing sports including soccer, rugby, cricket, basketball, baseball, American football and ice hockey –- more than 40 sports in total.

In June, Catapult announced the -US$18m acquisition of Perch, a Boston-based sports technology company which offers off-field, AI-integrated athlete monitoring solutions, developed originally at MIT, combining a 3D camera with proprietary AI that tracks athletes in the weight room to offer insights for personalised training programs.

Last week, Catapult announced the -US$91m acquisition of Impect, founded in Germany in 2014 to support player scouting and tactical analysis for soccer teams. The SaaS provider collects and owns the data that is then presented through proprietary “packing” metrics to provide unique match and player insights.

The purchase price has a bit to unpack, UBS notes, including -US$46m upfront, -US$32m in Catapult shares that vest over four years and -US$12m in earn-out equity to be issued again over four years.

UBS views this as a pretty reasonable up-front price as well as providing founder lock-in and incentive over a number of years. The acquisition will be funded by an A$130m (US$84m) equity raising and A$20m (US$13m) share purchase plan (SPP) at $6.68 per share.

On Friday, the shares were trading at $6.78.

Filling the Void

It had been well flagged by Catapult and well understood by the market that a scouting platform was the key missing module to the company’s overall video software platform, UBS notes. Catapult has now inorganically filled that void.

Clearly, the opportunity exists, UBS suggests, to drive revenue synergies in soccer and other flow sports through leveraging Catapult’s at-scale global sales force and large customer base compared to Impect’s 150 teams.

The key questions will be how Catapult can integrate this with its existing video suite, but more importantly how Impect Scouting could enable Catapult to better compete with current video incumbent and clear market leader, US-based Hudl and its Wyscout platform, which collects data and video from more than 600 competitions worldwide.

Impect, while small, is fast growing, Morgan Stanley notes. Annual contract value (ACV) has grown at a two-year compound annual growth rate of 68% from US$2.8m in July 2023 to US$8.1m in July 2025.

Morgan Stanley sees a strong strategic fit and expects Impect to be integrated seamlessly, augmenting Catapult’s offering with scouting and tactical insights, including its unique and proprietary “Packing” metrics.

Morgan Stanley believes Impect can accelerate both the velocity and value of cross-sell opportunities, particularly across Catapult’s existing base of around 1,500 soccer teams. Over time, there is potential to scale the technology across additional sports verticals.

Trading Update

Along with the acquisition announcement, Catapult provided preliminary first half FY26 (year-end March) results, featuring annual contract value (ACV) of US$115.3-115.6m, slightly above consensus.

Revenue came in at US$67.2-67.5m, management earnings US$9.0-9.5m and free cash flow US$3.7-4.0m. Bell Potter notes the free cash flow figure did not include -US$3m in transaction costs associated with the Perch acquisition. Without this the result would have been US$7.2-7.5m.

This is clearly a solid result and reflects ongoing strong top line momentum, UBS commented. Importantly, this represents another period of strong operating leverage with incremental margins of 52% being the fourth consecutive period in excess of 50%.

FY26 guidance was reaffirmed for ACV growth to remain strong (consensus 19%-plus), continued improvement in cost margins, and higher free cash flow.

The Risk

Financial disclosure with regard the Impect acquisition is limited, Morgan Stanley notes, other than ACV and the earnings margin of the target. Based on available information, the broker estimates the transaction will be dilutive to both earnings per share and free cash flow in the near term.

Catapult shares have materially outperformed the market over the last twelve months, up 204% to the ASX300’s 7.75%, predominantly driven by surpassing the critical inflection point of positive earnings and free cash flow. Morgan Stanley warns any deviation from this —if margins and/or free cash flow generation contract— could see the multiple de-rate from current levels.

Morgan Stanley expects elevated scrutiny around these metrics and ACV growth at the November results. For now, the broker retains its Overweight rating and has lifted its price target to $7.90 from $6.00, noting Catapult has globally scalable software and is serving a growing total addressable market.

It is clear to UBS we are now in the midst of a wave of consolidation within the global sports tech marketplace. Within the last twelve months alone, we have seen major players undertake multiple transactions, including Hudl, Sony, Teamworks, and Catapult.

The significant growth in the money within sports is creating a transformational period of sports tech product adoption by pro-teams, UBS notes. Nonetheless, the challenge remains for these start-ups to go from initial adoption to profitable scale-up. This is where Catapult has a unique position to come out as a major player through this consolidation given its significant pro-teams penetration and scaled sales force footprint.

UBS retains Buy, despite an unchanged target of $7.00. Note that the share price shot up almost 8% on the announcement to $7.70 before settling back.

Bell Potter has rolled forward its enterprise value to revenue valuation on Catapult for a year given we are now in the second half of FY26 and to better capture the full year impact of both Perch and Impect.

This broker has increased the multiple it applies to 9.0x from 7.75x given the strategic value of Impect and the opportunity to both cross-sell and expand the products into other sports.

The net result is a target price increase to $7.50 from $6.00 which, as a modest premium to the share price, prompts an unchanged Hold rating.

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