ASX-listed software-as-a-service, or "SaaS" provider K2fly has tabled a record 79 per cent growth in annual recurring revenue, or “ARR” in the September quarter this year when compared to the corresponding quarter in 2020. The boost to the company’s ARR follows the signing of three major long-term contracts that also lead to a record 125 per cent growth in total contract value, or “TCV” in the period.
ARR for the first quarter of FY22 clocked in at $4.06 million, a healthy 20 per cent lift over the $3.37m recorded in quarter two.
Total contract value in the period rose by a cracking 42 per cent over the previous quarter to come in at $14.02m.
The company logged $2.7m in cash receipts from customers, a hike of 34 per cent over the previous quarter and 36 per cent when compared with the same quarter last year.
Invoices raised came in at $2.6m, a 36 per cent increase on the corresponding period in 2020 to leave K2fly with a hearty $5.7m in the coffers as at 30 September.
K2fly focuses on the mining industry and operates under a “software as a service” business model that creates once off sales and annual recurring revenue streams, a key metric often used by software businesses.
Through platform-based cloud services, the company’s product offerings cover nine “solution” areas focused on environmental, social and governance, or “ESG” compliance, disclosure and technical assurance.
During the quarter, K2fly signed three new contracts with major mining industry players - Alcoa, Newmont and Sibanye-Stillwater.
A five-year deal with global bauxite and aluminium mining heavyweight, Alcoa, was sealed for K2fly’s ‘Dams and Tailings’ software across seven sites around the world.
K2fly also landed a five-year contract extension for its ‘Mineral Resource Governance’ solution with gold mining titan, Newmont.
Another five-year contract was signed with globally renowned platinum and palladium producer, Sibanye-Stillwater for K2fly’s ‘Tailings’ software across 38 tailings facilities globally.
Notably, after the quarter’s end, K2fly also snared its largest contract to date with mining giant Rio Tinto signing up for K2fly’s ‘Ground Disturbance’ software solution. The five-year contract expands the number of K2fly’s solutions used by Rio to five, boosting ARR by another $0.6m and TCV by $3.44m.
K2fly Chief Executive Officer, Nic Pollock said: “We have achieved record growth in TCV and ARR this quarter from three major contract signings all on 5-year terms, which will flow through to growth in future Invoices Raised and Cash Receipts…
We anticipate a continuation of further strong growth in the December quarter having recently signed a 5-year contract with Rio Tino post quarter end for our Ground Disturbance solution amounting to our largest single contract value signed to date of $3.44m, bringing our TCV to $17.6m post quarter end at the date of this report.”
K2fly’s growth driven strategy targets tier-one and tier-two global miners. If the SaaS provider continues to secure contracts with industry leading players as it has in recent times, the record growth in ARR and TCV recently attained may only be the beginning in the company’s business progression.
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