Scout Security reports increased monthly white label revenue
Growth in Scout’s monthly recurring revenue reflects sell-through and activation of its security systems through its own sales channels and its white-label partners.
Scout Security (ASX: SCT) has reported a 75% year-on-year increase in monthly recurring revenue, bringing annualised recurring revenue to $1.1 million for the three months to end September.
The growth reflects the sell-through and activation of Scout-powered security systems through the company’s own sales channels and those of its white label partners.
It has seen a related decrease in the number of hardware purchase orders, which totalled $43,000 for the quarter compared to $464,000 for the March quarter.
White label solutions
During the quarter, US sales of the Scout-powered white-labelled telco home security solution exceeded net average revenue per user (ARPU) forecasts at $7.60 per month (compared to an initial target of $4.70).
Meanwhile, the company’s first US internet service provider white label partner Windstream eclipsed more than $600,000 in annualised recurring revenue during the period.
In October, Scout announced it had secured US telco giant Lumen Technologies as its largest white label partner to date.
Under the terms of the deal, Scout will develop a motion sense home security app as part of a smart security platform build-out with functionality for Lumen to provide home security services, video cloud storage and smart home controls to its subscribers.
The solution will leverage existing whole-of-home WiFi equipment from Lumen, fibre internet, Scout video products and Lumen technology licenses.
Lumen will pay $357,000 in design, development and integration fees to Scout across pre-determined engineering and testing milestones.
The first payment was received by Scout during the quarter.
Scout said it expects to launch the smart security and control platform under Lumen’s branding in the first half of the new calendar year, with recurring revenues to follow.
Financials
In August, Scout entered into an agreement with an investor group comprising key Scout managers and directors, providing immediate access to a working capital facility of $250,000 in a single tranche.
In September, the company completed a $0.93 million placement to investor clients of Sequoia Corporate Finance and launched a partially underwritten $1.38 million rights issue.
The placement was followed by a non-renounceable rights issue on a one-for-four basis on the expanded capital base at the same terms as the placement to raise up to a further $1.38 million.
The funds will be used for working capital as Scout scales up its home security platform rollout via white label partners.
At end September, Scout had $484,000 cash at hand, reflecting an increase of $250,000 on the previous quarter.