Skyfii Ltd (ASX:SKF, OTC:SFIIF) executed a strategy to invest for growth and scale over the past 18 months via a combination of strategic acquisitions and allocation of capital to build its sales and service delivery capability globally.
The company, which helps organisations activate the power of their data through technology and human ingenuity, has expanded its customer footprint, driving annual recurring revenue (ARR) to $16 million, up 14% year on year.
Skyfii CEO and executive director Wayne Arthur said in the company’s annual report: “FY22 has been a year of investment into our operating model and resource base as we scale our operations to deliver operating leverage in FY23 and accelerated, profitable growth in the years beyond.”
FY22 saw Skyfii make several strategic investments into its operating model, which have created a scalable platform for more profitable growth in the future.
During FY23, the company’s attention will be focused on initiatives aimed at creating more efficiency within its cost base, to scale more cost-efficiently, alongside delivering strong organic revenue growth to bring the business back to profitability at all levels, including and most importantly, cash flow.
CrowdVision acquisition
In Q4 FY21, Skyfii expanded its scale and breadth via the strategic acquisition of CrowdVision, a leading crowd analytics software company providing passenger flow, queue monitoring and management solutions to the airport sector.
The acquisition diversified Skyfii’s product offering and added a new technology into its portfolio.
Importantly, the acquisition of CrowdVision consolidated Skyfii’s position as the leading provider of venue analytics in the global transportation vertical.
The acquisition provides a platform for Skyfii to expand its customer base globally, particularly in the lucrative airport vertical in the USA and EMEA.
Contract value growth
Skyfii’s investment in growth has considerably increased the scale and breadth of its operations.
During FY22, the company converted over $15.8 million of total contract value (TCV) via a range of new contracts and contract extensions.
The Americas and EMEA accounted for over 58% of the TCV converted during the year, reflecting the opportunity that these regions represent.
Skyfii’s 12-month rolling pipeline remains very strong at about $33 million.
Currently, the company has about $3.8 million sitting in the final stages of contracting and then a larger pool of just over $7.1 million of deals in the client evaluation stage that are one stage back from being contracted.
Over 15% of the pipeline has been generated in the past three months which is a positive reflection of the investment into Skyfii’s sales team and the company’s decision to invest for growth.
Outlook
Skyfii’s pipeline of venues including airports, commercial properties, quick service retail (QSR) chains, municipalities and stadiums remains strong and well advanced, and in conjunction with its cost efficiency initiatives, is expected to ensure long-term, sustainable and profitable growth.
Specific areas of focus for the Skyfii team in FY23 will include:
- focus on near-term conversion across CrowdVision and Skyfii sales pipelines in the key growth verticals of airports, stadiums and event centres;
- maintain growth in other verticals including Corporate Offices, Retail, Retail Property, Universities, Schools and Municipalities;
- full integration of the CrowdVision technology solution into the Skyfii offering and retirement of the legacy platform;
- resolution of supply chain issues that impacted 2H FY22 project closures;
- cost rationalisation and efficiency initiatives including offshoring talent to deliver material cost savings and maintain margins; and
- deliver ARR growth to >$20m in FY23 and deliver sustainable positive cash flow.
Annual performance summary.
