Knosys Reports Record $9.7m ARR and $3.5m Cash, Eyes March App Debut

Strong Enterprise Renewals Fuel Record ARR

Knosys Limited (ASX: KNO) has reported a milestone in its growth trajectory with a record Annual Recurring Revenue (ARR) run rate of $9.7 million as of January 2025. This achievement is underpinned by successful contract renewals with several large enterprise clients, including telecommunications giant Optus, Service Tasmania, and Healthdirect. The combined value of these renewals exceeds $3 million over the next two years, providing a robust foundation for recurring revenue streams.

The company’s flagship knowledge management platform, KnowledgeIQ, continues to resonate strongly with enterprise customers, reinforcing Knosys’ position in the SaaS market. These renewals, alongside new client acquisitions since mid-2024, signal sustained demand and confidence in Knosys’ offerings.

Focused Investment in Library Technology

Knosys is strategically pivoting to expand its footprint in the library technology sector, with a notable increase in research and development expenditure to $575,000 in the December quarter. This investment supports the imminent commercial launch of the Libero Library App, scheduled for March 2025. The app aims to revolutionize the library member experience by enabling 24/7 digital access to library resources, enhancing engagement beyond the physical library walls.

The Libero Library App boasts a suite of features including advanced search algorithms, barcode scanning, digital library cards, loan management, and personalized notifications. This product is designed to meet evolving customer demands in public and academic libraries, positioning Knosys to capture greater market share globally by FY27 with a comprehensive suite of library management solutions.

Cash Flow and Financial Position

Despite the strong ARR growth, Knosys reported a net operating cash outflow of $906,000 for Q2 FY25, a seasonal trend reflecting the timing of enterprise renewals and increased R&D spend. The company ended the quarter with a solid cash balance of $3.5 million and anticipates over $2 million in cash receipts by the end of January 2025, primarily from annual license fees paid in advance by large clients.

Management highlighted that Q2 is typically the weakest cash flow quarter, with improved cash inflows expected in subsequent periods. Staff costs were lower compared to the previous quarter, partly due to timing adjustments in payroll and recruitment expenses.

Outlook and Strategic Direction

Managing Director John Thompson emphasized the company’s commitment to becoming a world-class library technology provider. The upcoming launch of the Libero Library App marks a significant milestone, expected to open new commercial revenue streams and drive pipeline growth both domestically and internationally from FY26 onwards.

Beyond library-tech, Knosys is exploring artificial intelligence applications within its knowledge management and library solutions, aiming to stay at the forefront of innovation in its sector. This dual focus on enterprise SaaS and library technology diversification could position Knosys for sustained growth in a competitive market.