Following a successful December 2020 quarter, AD1 Holdings’ (ASX: AD1) utilities software division has collared a “landmark” five-year contract worth $10 million to provide energy retailer Locality Planning Energy with its software as a service solutions.
The agreement builds on AD1’s current services to the energy retailer where the utilities division has been providing billing and operations SaaS solutions, as well as related managed services.
This latest five-year contract expands the scope of utility division’s services to the energy retailer and includes energy sales intelligence (acquire) and customer portal (zone) solutions.
AD1 chief executive officer Prashant Chandra said the contract was a “landmark deal” for AD1.
“Our utilities SaaS solutions assist energy retailers enhance their value offering and achieve their growth objectives in a very cost-effective manner.”
“The five year expansion of services is a validation of the value in our commercial offering,” Mr Chandra noted.
Boosting cost efficiencies
It is expected that AD1’s solutions will drive cost efficiencies for the energy retailer including the cost-to-serve, while offering an enhanced customer experience that is underpinned by cutting-edge technology.
According to AD1, the five-year contract is structured to give strategic benefits to both the energy retailer and AD1.
The company describes its SaaS solutions as market leading and enterprise-wide. In this latest contract, AD1’s solutions have been further expanded to include acquire and zone, which has been specifically built for the Australian retail energy industry.
Additionally, the contract also allows for AD1 to provide ongoing customer-led enhancements to enable the energy retailer to continue innovating and accessing cost efficiencies.
Value to AD1
AD1 anticipates the contract will generate $10 million in revenue for the company over the five-year term – equating to about $2 million a year.
This is based on the energy retailer’s existing customer numbers.
According to AD1, this more than doubles the existing revenue it receives from its services to the energy retailer.
“The additional revenues under this contract will commence post implementation, anticipated to be completed during the July-September 20201 quarter, increasing the company’s recurring SaaS and managed services revenue by approximately 50% compared to FY 2020,” Mr Chandra said.