Knosys Surges to $9.8m ARR with Launch of AI-Ready Library Tech
Knosys Limited reports a record Annual Recurring Revenue run rate of $9.8 million, driven by strong enterprise renewals and new customer wins, alongside the launch of its next-generation Libero library app and upgraded LMS.
- Record Annual Recurring Revenue run rate of $9.8 million
- Strong Q3 FY25 cash receipts of $3.2 million with positive operating cash flow
- Launch of new Libero library app and upgraded Libero 6 Library Management System
- 125% increase in R&D investment to accelerate next-gen library technology
- FY26 outlook focused on AI-enabled solutions with expected commercial revenue
Strong Financial Momentum
Knosys Limited (ASX: KNO) has delivered a robust Q3 FY25 performance, reporting cash receipts of $3.2 million and a positive operating cash flow of $0.5 million for the quarter ended March 31, 2025. This strong cash generation was supported by the annual billing cycle of large enterprise clients, underpinning a record Annual Recurring Revenue (ARR) run rate of $9.8 million. The company’s recurring revenue streams remain resilient, bolstered by contract renewals and new customer acquisitions across its library and knowledge management solutions.
Next-Generation Library Technology Launches
Knosys has made significant strides in its core library technology business with the launch of the new Libero library app and the upgraded Libero 6 Library Management System (LMS). The Libero app extends member engagement beyond traditional library walls, offering digital access anytime and anywhere, while Libero 6 introduces enhanced search algorithms, improved event and booking management, and strengthened security features. Early customer feedback has been positive, with the products currently under consideration in multiple live tenders, particularly in Australia and Germany.
Strategic Investment in Innovation
Reflecting a strategic commitment to innovation, Knosys increased its research and development expenditure by 125% year-on-year to $0.6 million this quarter, alongside a 6% rise in staff costs. This disciplined investment aims to accelerate the development of AI-enabled capabilities, open-source integrations, and advanced workflow automation within its library management platform. The company envisions a fully market-leading software suite by FY27, targeting public and academic libraries globally.
Outlook and Market Positioning
Looking ahead to FY26, Knosys plans to continue investing in AI-driven library solutions, expecting these initiatives to generate commercial revenue from next fiscal year onwards. Managing Director John Thompson highlighted the company’s confidence in its product pipeline and the growing market interest, positioning Knosys to deepen customer value and expand its market share through innovation-led offerings. The company’s solid cash position of $3.9 million as of March 31, 2025, provides a stable foundation for these growth initiatives.
While the sales cycle for library technology remains tender-driven and potentially lengthy, Knosys’ recent product launches and strategic focus on AI integration signal a promising evolution in its service offerings. Investors will be watching closely for tangible revenue contributions from these next-generation solutions in upcoming quarters.
Bottom Line?
Knosys’ record ARR and AI-focused innovation set the stage for a transformative growth phase in library technology.
Questions in the middle?
- How quickly will AI-enabled features translate into meaningful commercial revenue?
- What is the competitive landscape for library management systems in key markets like Australia and Germany?
- How will Knosys balance increased R&D spending with maintaining positive cash flow?