Fintech company 8Common has announced their quarterly business results, showing record profitability driven by a 41% revenue increase over the prior corresponding period.
Recent shared service wins with the Federal Department of Industry, Innovation and Science (DIIS) and the Federal Department of Finance (DoF) deliver the potential for 61 entities and over 40,000 new employees to utilise the company’s platform.
The delivery of these entities on to the company’s platform will drive considerable revenue growth over the medium term. Implementation of Expense8 is dependent on client timeframes and progress will be announced when they begin generating revenue.
The first implementation of Expense8 as part of the DIIS shared services hub was announced during the quarter. The contract resulted in the addition of over 6,360 accounts (3,600 credit card and 2,600 cash reimbursement) and increases the total number of active federal government accounts using Expense8 Travel and Expense Management to 25,000.
Revenue for the quarter grew 41% on a pcp basis to $899k and the Company anticipates the positive quarterly growth trend to continue through the rest of FY20. The fall in revenue versus Q4 FY19 was driven by a reduced level of implementation revenue. Q1 of the financial year is the seasonally slower period for implementation revenue, as most projects aim to be completed by the end of the financial year. Despite the seasonal impact, Q1 FY20, was the third best quarter for total revenue in 8CO’s history.
In terms of product development, 8Common has entered early stage discussions with a significant Not for Profit organisation to deliver traceable expenditure via pre-paid cards. The revenue model will be based on a combination of subscription fees and basis point margin of the total value of the amount loaded on the pre-paid cards. Although in its early stages, the pre-paid card market is a significant opportunity to leverage the existing Expense8 platform.
Commenting on the September 2019 quarter, 8common Executive Chairman, Nic Lim said, “We are pleased with the strong operating metrics achieved despite what is traditionally a weaker quarter. Based on unaudited management accounts, 8Common recorded a profit of $246k during Q1 FY20 which included the $280k received from the R&D tax refund for FY18.”
CEO Andrew Bond said, “Our long-standing client relationships provide us with a great opportunity to deliver partnership centric solutions as we design and deliver innovation which meet our customers operational requirements. The opportunities we have identified include Continuous Monitoring, PayHero procurement payments and CardHero pre-paid card distribution and transaction reconciliation.
We continue to provide our clients with an innovative software solution that allows users to easily plan and manage corporate travel and look forward to providing the market with further updates as we progress growth opportunities.”
