ASX-listed mining software provider K2fly has unveiled revenue of $3.4m for the third quarter of the financial year – a 19 per cent rise on the company’s income from the previous quarter.
The company says the figure was a 35 per cent jump on the corresponding period last year and put the result down to freshly-inked contracts and “go live” milestone projects with major companies, BHP and Rio Tinto.
K2fly’s suite of software products focus on the environment, social and governance (ESG) space with the aim of providing assurance and accountability to its clients in their stewardship and management of natural resources. The provider’s suite of software as a service (SaaS) covers areas such as land access, ground disturbance, tailings and heritage management and mine rehabilitation.
The company’s success appears to stem from hitching its wagon to attention afforded to it by the global investment market and wider society on ethical corporate practice and responsiveness to environmental and social issues.
A Price Waterhouse Coopers report late last year found that investors globally are embracing ESG and investing on a massive scale, with the sector tipped to increase by 84 per cent to $50.45 by 2026. Importantly, the figure is said to represent an eye-watering 21.5 per cent of total assets under management, or more than $1 for every $5 invested.
K2fly’s SaaS services are billed annually in advance in a metric the company terms as annually recurring revenue (ARR). Management says its ARR grew in the third quarter by 2 per cent on the previous quarter to $7 million, representing a 35 per cent growth from the same period last year.
The company’s second key metric is total contract value (TCV), which is the aggregate of contract liabilities, future licence fees and unbilled one-off implementation fees. That metric grew by only three per cent in comparison to the same period last year, which it says is due to contract depletion and the billing of implementation milestones surpassing the value of new contracts.
In significant milestones for K2fly, two major projects went live across the quarter.
Its ground disturbance solution was implemented for BHP’s Pilbara operation and will cover that company’s entire iron ore undertakings. The one-year deal has a TCV of $2.12m and AAR of $620,000.
Rio Tinto also became the company’s first customer of its reconciliation module. The software complements the already installed K2fly resource disclosure solution. The three-year contract has a TCV of $360,000and an ARR of $75,000.
K2fly chief executive officer Nic Pollock said: “Revenue growth coupled with cost control supports the company’s focus on achieving operating cash breakeven. The go live for our Ground Disturbance solution in a large and complex operation in the Pilbara is our biggest single project to date and a significant milestone for K2fly. This project creates a template for which other resource industry players can use K2fly systems to demonstrate sector leadership in Land Management and Natural Resource Governance.”
With the successful implementation of two of the company’s key products to two of the mining sector’s heaviest hitters, K2fly appears to be laying the platform for even greater growth as others look to follow suit.
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By Steve Kaless
