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8common

ASX Release

18 July 2022

Record quarterly SaaS revenue and ARR of $3.5m

June 2022 Quarterly Report and Appendix 4C

Fintech company 8common Limited (8common or the Company) (ASX: 8CO), is pleased to release its consolidated quarterly cashflow and business update for the quarter ended 30 June 2022 (4Q FY22).

Key financial highlights for 4Q FY22 include:

  • Record quarterly transaction and recurring SaaS revenue of $832k, up 15% on the previous corresponding period (pcp) which was $714k. This includes a monthly all-time high of $297k in June
  • Total revenue for Q4 FY22 of $1.6 million (up +44% versus Q3 FY22) as the Company continues to generate implementation revenues associated with the roll out of the GovERP work package
  • The large level of implementation revenues in Q4 FY22 will lead to ongoing transaction and recurring SaaS revenue from FY23 onwards
  • The return of travel activity continues with a record of over 15,000 trips in the quarter, significantly higher than the 6,236 trips in Q3 FY22
  • Annualised Recurring SaaS and transaction Revenue (ARR) of c.$3.6 million at 30 June 2022
  • June 2022 ARPU of $19.54 is the highest level seen since the pre-pandemic levels of ~$20 in March 2020
  • Net cash outflow from operations for Q4 FY22 of $124k, an improvement on the prior quarter as the company increased revenue through the GovERP rollout.
  • CardHero development costs have decreased and are expected to shrink further as implementations and on-boarding activities grow
  • Cash balance at 30 June 2022 was $3.25m (31 March 2022: $3.76m) providing sufficient capital for 8CO to continue executing on growth strategies

Key financial highlights for FY22 include:

  • Transaction and recurring SaaS revenue of $2.9 million, up 18% on FY21
  • Total revenue of $4.5million, up 25% versus FY21

Key operational highlights include:

  • Ongoing rollout of the Federal GovERP work packages which to date have a cumulative value of over $1.4 million (inc-GST).
  • CardHero has gone live with Westhaven in May (ref ASX 23 March 2022) with first transactions recorded. CardHero provides a second revenue stream for 8CO with a strong outlook as not- for-profits, corporates and government agencies look to a solution for their fund distribution requirements.

4QFY21

3QFY22

4QFY22

% Change

(vs pcp)

Total Revenue ($Ak)

852

1,095

1,585

86.2%

SaaS & Transaction Revenue (A$k)

721

714

832

15.5%

Number of users (k)

166

177

182

9.7%

ARPU - Federal Government (A$)

42.9

32.3

43.3

0.9%

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ARPU - Total (A$)

17.6

16.2

18.6

5.7%

8common CEO, Andrew Bond said "The record quarterly transaction and recurring SaaS revenue of reflects the growing scale of our Expense8 and CardHero products amongst large enterprise, not for profits and state and Federal government. With user numbers expected to increase materially in coming months as the first entities under the GovERP work program go live early in FY23, we are set to deliver further increases in our transaction and recurring SaaS revenue in FY23 and beyond. With a solid balance sheet, growing Expense8 demand and the rollout of the CardHero platform, we are expecting further strong growth in FY23 and beyond."

Financial and operational review

The Company delivered record quarterly transaction and recurring SaaS revenue of $832k, up 15% on the previous corresponding period (pcp).

The number of users on our platforms continues to increase to over 182k reflecting the scale of our offering. Importantly, the lift in user numbers has been matched by a lift in ARPU. June 2022 ARPU of $19.54 is the highest level seen since the pre-pandemic levels of ~$20 in March 2020. The combination of growing user numbers and rising ARPU bodes well for future revenue growth.

The return of travel activity continues with over 6,200 trips recorded in the month of June alone, almost exceeding the entire Q3 FY22 total trips of 6,236. Travel activity is a high revenue per user event and the continuation of the return to travel delivers positive momentum to the business.

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The rollout of CardHero with its inaugural customer, Life Without Barriers continues to remain on track, in tandem with the Westhaven roll out. During the quarter CardHero contributed $23k to recurring SaaS and transaction revenue out of $832k total transaction and recurring SaaS revenue. Revenue levels will grow considerably in coming quarters as the Life Without Barriers rollout plan progresses.

During the quarter CardHero went live with Westhaven (ref ASX 23 March 2022) with first transactions recorded. CardHero provides a second revenue stream for 8CO with a strong outlook as not-for-profits, corporates and government agencies look to a solution for their fund distribution requirements.

The GovERP work package continues to progress (ref ASX release 14 January 2022). The total value of signed contracts to date under the GovERP is over $1.4 million (inc-GST) and encompasses onboarding seven existing customer entities and the pre-onboarding consultation for eight new entities onto the GovERP version of Expense8. This collectively incorporates over 10,500 users, onto the GovERP version of the Expense8 travel & expense management platform. During the quarter approximately $627k of implementation revenue was recorded from the GovERP work package. Recurring and SaaS transition-based revenue is expected to commence in early FY23, with 8CO currently generating a Federal Government ARPU of $47.45 in June 2022.

Total revenue

$1.8m

$1.5m

1.59

$1.3m

$1.0m

1.04

1.06

1.00

1.01

1.10

$0.8m

0.90

0.88

0.92

0.93

0.85

0.82

0.78

$0.5m

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

FY19

FY20

FY20

FY20

FY20

FY21

FY21

FY21

FY21

FY22

FY22

FY22

FY22

Recurring SaaS & Transaction revenue

$0.9m

$0.8m

0.83

$0.7m

0.72

0.71

0.69

0.68

0.70

$0.6m

0.66

0.63

0.59

0.58

$0.5m

0.54

0.55

0.52

$0.4m

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

FY19

FY20

FY20

FY20

FY20

FY21

FY21

FY21

FY21

FY22

FY22

FY22

FY22

The company continues to focus on costs and expenses. Staff, administration, and corporate costs were $1,637k for the quarter, up from $1,031k in the previous quarter given the increase in investment in CardHero, the GovERP rollout and other corporate costs during quarter.

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Payments to the Directors of the entity, comprising of salaries and fees for Executive and Non-Executive Director, totalled $93k during the quarter (see section 6 of the Appendix 4C). No other payments were made to any related parties or their associates of the entity.

The Company generated a net operating cashflow outflow of $124k, an improvement on the prior quarter, due to the GovERP program implementation rollout.

The company has a strong cash position of $3.25 million as at 30 June 2022.

Cash Flow performance

$2.5m

$2.0m

1.99

1.52

$1.5m

1.31

1.00

1.03

0.99

1.27

0.87

1.02

1.03

1.02

$1.0m

0.39

0.82

0.72

$0.5m

$0.0m

0.05

0.05

0.05

0.03

-0.05

-0.02

-0.15

-0.12

-$0.5m

-0.25

-0.31

-0.55

-$1.0m

-0.67

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

FY19

FY20

FY20

FY20

FY20

FY21

FY21

FY21

FY21

FY22

FY22

FY22

FY22

Cash Receipts

Net Operating Cash

Outlook

The Company continues to expand its presence amongst government, not for profit and large enterprises, reflected in the increasing number of users across our two solution platforms. Increasing travel activity and a growing proportion of users on our platforms from within Federal government is anticipated to grow our ARPU over FY23 and beyond. Increasing ARPU, coupled with a growing level of users will continue to drive our track record of quarterly revenue growth.

With a dedicated team, robust financials, and strong pipeline of Expense8 and CardHero growth opportunities, the Company has established a solid platform for continued growth over FY23 and beyond.

Further information

Corporate

Investors

Nic Lim

Craig Sainsbury

nic@8common.com

craig.sainsbury@marketeye.com.au

Executive Chairman

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About 8common Limited

8common (ASX:8CO) solutions deliver enterprise grade financial transaction processing for government entities and large enterprise businesses. Its flagship Expense8 platform is a leading pureplay provider of end-to-end travel expense management software, card application and management. The innovative software solutions improve organisation, productivity, incorporate company organisational policies and expense auditing to reduce fraud. Expense8 by 8common was named a Major Player in the IDC MarketScape: Worldwide SaaS and Cloud-Enabled Travel and Expense Management Applications 2019 Vendor Assessment.

Its new product CardHero (pre-paid card fund distribution) delivers a closed loop solution to support regulated, large network and high volume requirements. 8common specialises in large enterprise and government segments.

Its growing client base of more than 182,000 platform users include enterprise customers Woolworths, Broadcast Australia, Amcor, and over 158 state and federal government entities. For more information, visit https://www.8common.com/

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8common Ltd. published this content on 17 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 July 2022 23:33:06 UTC.