Hubify signs five-year enterprise agreement with Optus, shifts focus to enterprise market
Hubify has secured a new five-year agreement with Optus, focusing on enterprise services and received a $2.28 million termination payment for exiting the small business segment.
Australian provider of information and communications technology (ICT) Hubify (ASX: HFY) has signed a new five-year agreement with Optus to market Optus Enterprise Services to Australian businesses.
This agreement will replace the current agreement, which was signed in April 2021 and expires on 31 March 2023, and will extend the partnership through April 2028.
Based on the current run rate, Hubify estimates the agreement will bring in $12 million in revenue over the five-year period and will focus on the enterprise market.
On 1 May 2023, Hubify will exit the Optus Small Business Program and receive a $2.28 million termination payment.
This payment will increase Hubify’s cash position to more than $4.6 million, with no debt remaining after that date.
An existing master services agreement with Optus to provide managed IT services to Optus enterprise customers will not be affected by these modifications.
The agreement remains unchanged, with Hubify receiving an annualised recurring revenue of $800,000.
Mid-market and enterprises business segment
The new agreement and reorganisation of Hubify’s relationship with Optus enables the company to concentrate its efforts on the mid-market and enterprise segments to accelerating the expansion of all divisions.
Hubify chief executive officer Victor Tsaccounis said the company was “pleased” to refocus its partnership with Optus for another five years, including introducing Optus enterprise products and services to our customers.
“These changes will enable the Hubify team to remain focused on scaling the business across all divisions leveraging our leading ICT product and services catalogue,” Mr Tsaccounis added.
In the first half of the fiscal year 2023, Hubify will realise administration cost savings of approximately $1.69 million per year, in addition to the savings of $1.56 million per year from the restructure.
The new annualised recurring revenue run rate for Hubify as of 1 May 2023 will be $17.8 million per year.