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Knosys - Quarterly Activities/Appendix 4C Cash Flow Report

Key Highlights:

-- Increase in ARR to $8.9m: Q2 reflects the full contribution from both the GreenOrbit and Libero acquisitions and Annual Recurring Revenue (“ARR”) is now tracking at $8.9m compared with the prior corresponding period (“pcp”) of $3m ARR.
-- Customer numbers at over 360: The Company has a strong and diverse customer base across multiple regions (pcp of 9 customers).
-- Strong annual growth in cash receipts: Q2 receipts from customers of $1.9m, up 157% from $0.7m on pcp, primarily due to the contribution from acquisitions of GreenOrbit and Libero. Q2 cash receipts were lower than $2.9m in Q1, however cash inflow is normally higher in Q1 due to the timing of annual renewals.
-- Positive operating cashflow for 1H FY22: Operating cash outflow of $0.7m for Q2 offset operating cash inflow of $0.9m in Q1, reflecting positive operating cash flow of $0.2m in 1H FY22. This was down from $1m on pcp due to increased sales & marketing spend consistent with the company’s enhanced growth strategy and expanded operations.
-- Solid cash position: The cash balance at 31 December was $3.6m, which is after the $1m final cash payment to the Libero vendors in Q2 and $0.26m of equity contributions.
-- New wins in KM: New customer wins in Q2 in Knowledge Management and increased purchase orders from existing customers increase annualised revenue by over $230K.
-- Acquisitions performing well: GreenOrbit continues to deliver revenue uplift from an increased Annual Revenue Per User (“ARPU”) on annual subscription renewals and Libero revenues tracked ahead of expectations in the first full quarter contribution in Q2. Cross selling and cost sharing opportunities are being realised as planned.

Knosys Limited (ASX:KNO) (“Knosys” or the “Company”), is pleased to provide this December 2021 quarterly activity report and Appendix 4C.

December 2021 Quarter cashflow

In the December 2021 quarter, Knosys received $1.9m in cash receipts from customers, up 157% on the $0.7m received in the December 2020 quarter, due to a full quarter contribution from both recent acquisitions, GreenOrbit and Libero. Group cash inflows are typically lower in Q2 compared to Q1 with a higher proportion of annual subscriptions occurring at the commencement of the financial year. Cash receipts from customers for the 1H FY22 were $4.8m, 73% higher than pcp.

Knosys generated negative operating cash flow of $0.7m in Q2, however the operating cash flow was positive by $0.2m in the first half to December 2021. This was down 70% on pcp from $1m in 1H FY21 1 2 due to increased spend on sales & marketing and expanded operational costs following the two acquisitions and consistent with the company’s enhanced growth strategy. Staff costs increased to $1.7m in Q2, reflecting the full employee cost base for the combined KIQ, GO and Libero businesses.  

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