Coming off the back of its maiden cash flow positive quarter, recruitment technology and utilities SaaS solutions company AD1 Holdings (ASX: AD1) has signed a new three-year managed services agreement with 3P Energy.
The agreement is expected to become revenue generative in Q4 2020 with AD1 being tasked to provide 3P Energy with its full suite of SaaS solutions and related managed services aimed at customer acquisition, billing, operational logistics and customer analytics.
The win in AD1’s utilities SaaS business follows the successful extensions in the company’s recruitment-platform with the Victorian and NSW state governments.
According to official statistics, the NSW and Victorian governments are the two largest employers in Australia.
Last month, AD1 reported that it had banked $217,000 from operating activities in Q2 2020, citing the company’s focus on accelerating the path to break even, through the integration of SaaS platform provider Utility Software Services, a company AD1 acquired in 2019.
Another reason for the company’s robust results was its prioritisation of a “significant reduction in outflows”.
Furthermore, AD1 generated cash receipts $3.6 million in the last financial year – an increase of 52% over the previous year, while operating outflows decline by 18% to $1.25 million.
Net cash outflows from operating activities fell by 53%.
As a hint that today’s deal could just be a taster of more to come, AD1 Holdings chief executive officer, Prashant Chandra, revealed that the company continues to “progress multiple new business opportunities” and is concurrently engaged in “late-stage discussions and expected to close in the current quarter”.
Partnering for sales and commerce
Currently, 3P Energy is owned by parent company National Solar Energy Group (NSEG), a company with several existing businesses providing a range of solar services and solutions throughout Australia.
NSEG’s largest business operates under the name of Sunboost and is Australia’s largest provider of solar technology to the residential and commercial markets.
By striking a deal with 3P Energy, AD1 can effectively expand the number of users on its platform and raise the company’s profile domestically.
“We are very pleased to expand our relationship with 3P Energy to a multi-year Managed Services Agreement having previously provided them with consulting services to co-develop a technology roadmap for the provision of innovative retail energy services focusing on solar energy solutions,” Mr Chandra said.
“The successful appointment of the company under the Managed Services Agreement is a validation of our competitive advantage as it relates to partnering with new market entrants,” he added.