24/03/2020 - 13:54

K2fly hits 2-yr revenue target in 9 months

24/03/2020 - 13:54

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ASX-listed K2fly management has smashed its year 2 recurrent revenue targets just 9 months after picking up its “RCubed” mining software business for around $450k plus some delayed payments on the back of revenue targets being achieved. The rapidly growing ASX-listed software company said this week that its annual recurrent revenues have now hit $1.83m, representing a spectacular 247% compound annual growth rate.

K2fly CEO, Brian Miller

ASX-listed software provider, K2fly, has delivered in spades against its own annual recurrent revenue targets for its “RCubed” mining software package that it sells as a service to mining companies who use it to ensure their resource and reserve reporting remains compliant.

K2Fly picked up RCubed for $450k in May last year with some additional milestone payments to be made to the vendors if management could get the annual recurrent revenues for RCubed to $715k by year one, $1.215m by year two and $1.715m by year three.

The Subiaco based software provider said this week that just 9 months after purchasing RCubed, it has already achieved the year two, recurrent revenue milestone with the year one milestone falling in November last year, just 6 months after the acquisition.

The achievement of the year one milestone will trigger a further $600k payment to the vendors, paid in two stages, with the first payment to occur around May this year.  The achievement of the year two and three milestones will trigger further vendor payments of $400k and $200k respectively, with both additional milestone payments also to be paid in two staged payments.

Interestingly, the entirety of the vendor milestone payments can now be funded by just one year’s worth of annual recurrent revenues from RCubed given the exponential growth achieved in client sign ups since its acquisition.

K2Fly said that its total “software as a service” annual recurrent revenue stream for all products now stands at A$1,834,250 and the kicker - 75 per cent of those contracts are in US dollars, providing the company with a serious forex win with the Aussie dollar dropping to around 58c recently against the USD.

K2fly said the total forward year contracted value across all its software as a service platforms has now exceeded A$4.7M and with another $1m in implementation revenues on top of that, the company looks well set to weather the ravages of the Coronavirus as it send markets into a frenzy.

In fact K2Fly is better placed than most with locked in forward revenue contracts and a product that its clients need to use to comply with the law – something that is not discretionary, even in the new Coronavirus world.

K2fly said interest from NYSE-listed resource companies remains high due to US SEC regulatory changes due to come into effect in 2021.  The company already has some of the world’s top ten gold producers on its books and no doubt more will follow as mining resource reporting regulations align around the globe, as is already the case with the ASX and NYSE.

K2fly Chief Commercial Officer, Nic Pollock said: “In Q3 FY20 K2fly has achieved further validation for its RCubed SaaS solution including new contracts with Gold Fields Australia, Newmont as well as a 3-year extension by Anglo Gold Ashanti and contracts for proof of concepts designs with South 32 and Vale. The most recent signing of new contracts for the RCubed Software Solution combined to exceed the contracted first and second year ‘net new annual revenue’ acquisition performance milestones, which is significantly ahead of schedule.”

“Despite recent global headwinds, demand and interest in the RCubed Software Solution has not waned, as it is regulatory driven and companies still have ongoing reporting obligations for their mineral resources and ore reserves. Importantly, our implementations require little to no time on site and can be adapted to be fully implemented remotely, accommodating the current world circumstances. Furthermore, 75% of our contracts for RCubed are in US dollars, which is highly beneficial with the depreciating AUD, and given most of our costs are in AUD and ZAR.”

 

Is your ASX listed company doing something interesting ? Contact : matt.birney@businessnews.com.au

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