Skyfii Ltd (ASX:SKF, OTC:SFIIF) has delivered positive operating cash flow of $2.3 million for the half-year ended 31 December 2022 (1H FY23) supported by cash receipts of $15.9 million during the period, which is up 44% compared to 1H FY22.
The company generated total revenues of $11.2 million during 1H FY23, up 0.7% on 1H FY22, and is on track to meet its guidance of achieving annualised recurring revenue (ARR) of over $20 million in FY23.
Cost saving initiatives
Total operating expenses excluding depreciation, amortisation, non-cash share-based payments and finance costs declined 5.8% vs 1H FY22 to $12.8 million as the company continued to focus on cost saving initiatives.
Skyfii’s offshoring strategy to unlock access to a larger talent pool and the opening of an engineering and operations centre in Portugal continue to progress.
These initiatives will set the company up for long-term, sustainable and cost-effective scale moving forward and are expected to generate $1.6 million in annualised cost savings by the end of CY2024.
Positive EBITDA expected in 2H FY23
Skyfii CEO and managing director Wayne Arthur said: “Skyfii delivered positive cash flow in 1H FY23, well ahead of guidance and with strong ARR momentum already into 2H FY23.
“I am pleased to confirm that we remain on track to meet our guidance of achieving ARR of over $20m in FY23, while maintaining sustainable cash flow breakeven position during the second half of the financial year.
“We also expect to deliver positive EBITDA in 2H FY23.
“Our confidence is driven by the strong momentum that is continuing into 2H FY23 as recent deal conversions are delivering significant uplift in operating revenues.
“This, together with our ongoing cost management, efficiency initiatives and strong pipeline will provide Skyfii with operating leverage during FY23.”
Outlook
Having delivered a positive cash flow performance in 1H FY23, well ahead of guidance and with strong ARR momentum already into 2H FY23, Skyfii remains on track to meet its guidance of achieving an FY23 exit ARR of >$20 million and to maintain a sustainable cash flow breakeven position during 2H FY23.
Specific areas of focus for the Skyfii team throughout the remainder of FY23 include:
- Continued business development focussed on key verticals, specifically airports, stadiums, retail and quick service restaurants;
- continued cash management and efficiency initiatives, including offshoring of talent, to deliver material cost savings and to maintain margins;
- delivery of contracted recurring revenue from the high level of implementation revenue delivered in 1HFY23; and
- the company expects to announce new contracts in the airport, stadium and retail verticals in 2H FY23.
Arthur added: " In 2H FY23, our key objective will be on continued business development focussed on key verticals, specifically airports, stadiums, retail and quick service restaurants while delivering recurring revenue from new contracts announced in 1H FY23."