8common remained EBITDA and operating-cashflow positive in the September quarter, even as revenue fell 7.8% year on year. Its $1.9 million Australian Taxation Office contract is yet to contribute revenue, with implementation expected to begin in January.
- Operating cash inflow of $91,000 and positive EBITDA of $57,000
- Total revenue fell 7.8% to $1.54 million
- Three-year ATO Expense8 contract valued at $1.9 million including GST
- Cash ended the quarter at $121,000, supported by an undrawn $1.5 million facility
- Platform users rose 2.2% year on year to 189,000
Cashflow Holds Positive Despite Lower Revenue
8common Limited (ASX:8CO) kept its operating engine in the black during the September quarter, reporting a $91,000 net cash inflow from operations and positive EBITDA of $57,000. The result came despite total revenue declining 7.8% year on year to $1.54 million.
SaaS and transaction revenue fell 4.2% to $1.24 million, while average SaaS gross margin was 73%. The company’s user base grew 2.2% to more than 189,000, but average revenue per user slipped 6.5% to $26.14. EBITDA was down from $145,000 in the prior corresponding quarter, and the net loss widened to $131,000.
ATO Contract Sets Up January Implementation
The most substantial commercial development is a three-year Expense8 software and platform contract with the Australian Taxation Office, carrying a total contract value of $1.9 million including GST. The contract covers more than 20,000 users, and project commencement is expected in January 2027.
The ATO agreement builds on the earlier ATO contract, which was reported as a three-year deal covering SaaS, transaction and related services. 8common said the implementation component remains subject to finalisation and that no revenue has yet been recognised from the latest contract.
Government Pipeline Expands Through Renewals
Expense8 also secured one-year extensions with the National Anti-Corruption Commission, the Australian Radiation Protection and Nuclear Safety Agency and the National Indigenous Australians Agency, alongside a two-year extension with Edith Cowan University.
Management said the federal government pipeline includes demonstrations, proposals, tender processes and discovery workshops, with approximately 197,000 potential users identified as at 30 September. That pipeline is an opportunity rather than booked revenue, making conversion into live users and recurring income the key test for the coming quarters.
Low Cash Balance Relies on Chairman Facility
8common finished the quarter with $121,000 in cash after $84,000 of investing outflows, including $36,000 for intellectual property development and $48,000 for property, plant and equipment. The company also said the introduction of PayDay Super effectively pulled two quarters of superannuation payments into the period, adding approximately $70,000 to cash outflows.
Liquidity is supplemented by a $1.5 million unsecured loan facility from Executive Chairman Nic Lim. Nothing was drawn at quarter end; the facility carries 6% interest and expires on 1 May 2027. CardHero contributed $78,000 of quarterly revenue and remained cashflow positive, but the group’s modest cash balance means the timing of ATO implementation and any future facility drawdown remain material details.
Bottom Line?
The January ATO start date is the next practical test: 8common has secured the contract, but has not yet converted it into reported revenue.
Questions in the middle?
- When will the ATO implementation component be finalised, and when will revenue recognition begin?
- Can the government onboarding pipeline convert into higher users and ARPU after the recent revenue decline?
- Will 8common need to draw on the chairman’s $1.5 million facility before it expires in May 2027?