Mining software provider K2fly has recorded a remarkable 15 straight quarters of annual recurring revenue (ARR) growth, which it says has been driven by contract renewals with two major clients.
According to its March quarterly report, the company delivered an ARR of $8.3 million in the first three months of the calendar year, representing a 19 per cent increase when compared to the previous corresponding period.
Cash receipts also increased from $3.2 million in the previous quarter up to $3.6 million at an uplift of 13 per cent, while its total contract value was sitting at an impressive $17.9 million. Gross operating expenditure remains consistent with the two previous quarters at $4.2 million.
While revenue for the period was down by 13 per cent compared to the previous quarter at $2.9 million, management says the decrease is due to the completion of implementation projects in prior periods, resulting in lower services revenues.
Management says it continues to work alongside a tier-one mining client that renewed its Infoscope land management contract for a further two years and builds on a 15-year continuous engagement with the platform. The new contract is valued at $650,000 ARR and represents a 23 per cent cumulative annual growth rate over four years.
Another tier-one global mining client is renewing its heritage solution for a further three years.
K2fly chief executive officer Nic Pollock said: “K2fly continues to focus on our ARR growth as a key metric coupled with our exceptional rolling 12-month gross retention rate of 98%. To that extent Q3 FY2024 was a continuation of our journey with the 15th quarter of ARR growth, by 19% YoY to $8.3m.”
During the March quarter, the company completed a key component of its five-year deal with the world-class Roy Hill iron ore operation in Western Australia’s Pilbara region for the use of its "ground disturbance” solution that is now live.
Under the agreement, which is expected to generate annual recurring revenues of $300,000 and has a total contract value of $2 million, Roy Hill has committed to using K2fly’s solution for its integrated iron ore mining, rail and port operations in the Pilbara for five years.
The independent Roy Hill iron ore operation is the single-biggest ore mine in Australia. It is chaired by Australia’s richest woman Gina Rinehart, who also has local majority ownership, and ships more than 60 million tonnes of iron ore annually and has approvals to move up to 70 million tonnes per year.
The recent deal with Roy Hill follows an initial contract for the K2fly mine technical assurance suite that was signed in May 2021.
K2fly’s solution is a comprehensive approvals and tracking system for ground disturbance works that provides real-time operational updates to keep track of clearance limits, obligations and any breaches.
The company’s list of clients features a host of major movers and shakers in the mining and resources industry including Rio Tinto, BHP, Fortescue Metals Group, South 32 and Anglo American.
Just this month, K2fly added Brazilian iron ore and nickel giant Vale to its books with a contract to supply the powerhouse with its unique mining software across 69 sites for at least three years. The deal will add almost half a million dollars a year to the company’s all important ARR figure as it looks towards a 16th consecutive quarter of growth in the financial metric.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Michael Philipps
