Human resources technology business intelliHR Holdings (ASX: IHR) has moved a step forward with its global expansion strategy, adding the largest customer to date to its people management software platform.
The customer, whose details remain undisclosed, is headquartered in the United States and has operations throughout Australia, New Zealand, Thailand, India, the United Kingdom and Canada.
When implemented, the new contract will represent the largest customer by annual recurring revenue to date on intelliHR’s platform, and lift its contracted headcount by approximately 800 paying users.
It is the young company’s second sale initiated out of the US and will be followed by user rollout into the Philippines, Australia, Thailand, India, the UK and North America.
When added to other recent customer wins, intelliHR’s total contracted headcount is now close to 6,000 paying users.
intelliHR is developing and marketing a next-generation, cloud-based people management and data analytics platform, delivered to customers by a Software-as-a-Service model.
The company’s increase in customer base during 2018 led to rapid growth in annual recurring revenue due in part to its subscription-based revenue model and the “stickiness” of these contracts.
Stickiness refers to a customer’s commitment to wanting (or having) to re-use a product, usually because that product has at least one feature which solves a problem they periodically face.
intelliHR generates income from ongoing subscription fees and once-off professional services fees for implementation, training and process re-design workshops.
Services delivered as part of the implementation are amortised over the life of a contract in line with revenue recognition accounting standards.
The company said it expects its professional services fees to grow over the coming year and contribute to 40% of its revenue.
“[Our business model is] critical for our growth as a scalable, industry and location-agnostic human resources management platform,” said managing director Robert Bromage.
“We believe recent increases in our annual recurring revenue and contracted headcount prove the stickiness of our product.”
A year of validation
Mr Bromage said 2018 has been a year of validation for the company, demonstrating geographic expansion capability and product competitiveness in local and international markets.
“[Our] product and service offering has been validated with high quality brands signing up across Australia, New Zealand and directly out of the US,” he said.
“We believe the increased uptake of customers and users can be partly attributed to the expansion of our partner program.”
The company currently has 17 high-profile partners onboard, including human resources consultancies, management consultants and technology businesses.
At midday, shares in intelliHR Holdings were trading 33.33% higher at $0.180.