8common Hits Record $1.2M SaaS Revenue Amid User Growth Surge
8common Limited reports a record $1.2 million in SaaS revenue for Q2 FY25, driven by a 12% increase in users and strong government contract activity. Despite tight cash balances, the company remains funded through a chairman-backed facility.
- Record Q2 SaaS and transaction revenue of $1.2 million, up 9% year-on-year
- User base grows 12% quarter-on-quarter to 182,000 active users
- Annualised Recurring Revenue (ARR) reaches approximately $5 million
- Cash position stable at $0.1 million, supported by $1.5 million financing facility
- Strong tender and proposal activity signals robust pipeline for government contracts
Record Revenue Growth Driven by User Expansion
Fintech SaaS provider 8common Limited (ASX: 8CO) has delivered a standout performance in the second quarter of fiscal 2025, posting record transaction and recurring SaaS revenue of $1.2 million. This represents a 9% increase compared to the same period last year, underscoring the company’s growing traction in the government and enterprise expense management market.
The company’s flagship Expense8 platform continues to gain momentum, with active users rising 12% quarter-on-quarter to 182,000. This user growth has been a key driver behind the improved Annualised Recurring Revenue (ARR), which now stands at approximately $5 million, reflecting the platform’s expanding footprint across federal and state government agencies.
Operational Highlights and Government Engagements
8common’s operational update reveals significant progress in onboarding new government clients, with 19 additional agencies going live in New South Wales. Notable additions include Heritage NSW, the Environment Protection Authority, and the National Parks and Wildlife Service. These wins reinforce 8common’s position as a trusted provider of enterprise-grade financial transaction processing solutions tailored for public sector needs.
The company also navigated a complex transition involving the Federal Government’s Travel and Procurement Payment Services (TAPPS), which required reconfiguration across all clients due to a switch to NAB payment cards. While this caused some revenue deferral in the previous quarter, the impact was reversed in Q2, and the transition is expected to complete by Q3 FY25.
Financial Discipline Amid Tight Cash Position
Despite the revenue growth, 8common reported a marginal net operating cash outflow of $12,000 for the quarter, reflecting ongoing investments in business development and operational optimisation. Staff and corporate costs remained steady at $1.7 million, consistent with the prior quarter.
The company’s cash balance held firm at $0.1 million as of December 31, 2024, but this position is underpinned by a $1.5 million unsecured financing facility provided by Executive Chairman Nic Lim. This facility, bearing a 6% interest rate and maturing at the end of 2025, ensures the company remains adequately funded as it scales its operations.
Looking Ahead: Robust Pipeline and Strategic Partnerships
CEO Andrew Bond highlighted the unprecedented level of tender and proposal activity heading into the second half of the fiscal year, signaling a strong pipeline of potential new contracts. Additionally, reseller partnerships are gaining traction, with expectations for further collaborations to accelerate market penetration.
CardHero, 8common’s prepaid card fund distribution product, continues to operate cashflow positive and contributed $107,000 to recurring revenue this quarter, adding diversification to the company’s revenue streams.
With approximately 190,000 potential users in the federal government onboarding pipeline, including over 55,000 engaged in preliminary discovery workshops, 8common is well positioned to capitalize on future growth opportunities.
Bottom Line?
8common’s record SaaS revenue and expanding user base set the stage for growth, but cash flow management will be critical as government transitions complete.
Questions in the middle?
- How will the completion of the TAPPS card transition impact revenue visibility in Q3 and beyond?
- What is the timeline and likelihood of converting the strong tender pipeline into signed contracts?
- Can 8common sustain operational efficiency gains to improve cash flow without compromising growth?
