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K2fly on upward trend with 28 per cent revenue jump

Updated: Apr 15


K2fly has revealed a significant revenue increase. Credit: File

Software provider K2fly has revealed a steady stepladder towards profit-making after its latest financial year report showed healthy revenue of $12.8 million – a jump of 28 per cent on the previous period.


The company’s positive result was bolstered by a 25 per cent increase in annual recurring revenue up to $7.5 million. It says that meant its three-year annual recurring revenue compound annual growth rate (CAGR) sits at a healthy 48 per cent, while its four-year CAGR is at 36 per cent.


The company says its revenue growth contributed to a 65 per cent improvement in earnings before interest, tax, depreciation and amortisation (EBITDA) during the past financial year (FY23). Its EBITDA for the 2022 financial year showed a loss of $5 million and that figure improved to a loss of $1.7 million during the past period.


K2fly’s annual financial report showed its losses for the year were $2.21 million, down 52 per cent from the previous year’s losses of 4.62 million, due to what it says was prudent cost management.


The company says the revenue growth is a function of securing new clients throughout the financial year and growing its range of software and services, in addition to price increases. It says its costs grew at a rate of 20 per cent for the year – slower than its revenue growth – driven by cost management strategies in conjunction with scale economies.


Management also points out that it invested $2.7 million in technology solutions and platforms during FY23, the same as the previous year.


K2Fly’s suite of software as a service (SaaS) products provide resource governance solutions to the mining industry to ensure compliance, disclosure and technical assurance.


Its star-studded client list grew in June, when French-owned mining company Eramet SA signed a three-year deal worth $564,000 to cover resource disclosure across its five operations and four commodities.


Just a week later, mining giant BHP re-enlisted the company to provide it with ground disturbance solutions for three more years, a deal reportedly worth about $1.99 million.


Roy Hill Holdings also showed a clear liking for K2fly’s product suite, signing a $2 million deal last month, which will see integrated solutions for iron ore mining, rail and port operations provided to the mammoth WA miner for five years.


K2fly remains the only commercial off-the-shelf SaaS solution available globally for the mining sector to ensure proper resource governance.


The company’s existing clients include seven of the top 10 global resources leaders. Gold clients include Newmont Corporation, Westgold Resources, Newcrest Mining and AngloGold Ashanti. Iron ore clients include Rio Tinto, Fortescue Metals Group, Anglo American and ArcelorMittal. Other metal and mineral clients include South32, Glencore, Nexa Resources and Sibelco.


Management has deployed its solutions across over 850 sites and 148 commodity types in 62 countries. It has 60 per cent of its clients in Australia, 20 per cent in Europe, the Middle East and Africa, while 20 per cent are in the Americas.


K2fly’s software licencing model is designed for recurring revenue, with contracts averaging 43 months and featuring annual payments in advance. The company says it plans to hit profitability by delivering across three key areas – continuous sales growth, product leadership and customer success.


It says it will grow its sales team and implement a business development function, while exploring renewable energy linear assets markets such as rail and pipeline and onshore oil and gas. To develop its products, the company says it will leverage artificial intelligence to learn from existing customer datasets, while launching its expanded mineral resource governance suite.


K2fly says its existing customers will benefit from an expanded account management function and improved product quality and predictability improving consistency, delivery efficiencies and margins across all projects.


The reported revenue gain is certainly welcome news and forms part of a bigger growth picture for the company as it expands its services to the massive global mining space.


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