TZ Limited’s new SaaS revenue model reaps rewards as adjusted EBITDA for FY2022 soars 831%
TZ Limited posted its first net after tax profit for FY2022 of $42,896.
Smart locker and software technology company TZ Limited’s (ASX: TZL) annual report for the 2022 financial year (FY2022) is evidence of the company’s success in carving a new innovative revenue stream, with adjusted earnings before interest tax depreciation and amortisation (EBITDA) soaring 831% for the period.
The company revealed today that adjusted EBITDA for FY2022 had rocketed to almost $1.3 million, compared to $137,364 in FY2021.
As a result, TZ posted a net after tax profit of $42,896 – up substantially on a $1.66 million loss in the previous corresponding period.
Bumping the company into profitability was a 31% increase in revenue to $21.4 million.
TZ non-executive chairman Peter Graham said the company’s biggest positive step forward in FY2022 was building the software platform income stream.
“The management team developed a product that is being positively accepted in the marketplace.”
He said monthly recurring revenue (MRR) has risen to $260,000 a month, with a further $26,000 to be added in the near-term.
This additional $26,000 per month comes from TZ’s recently announced agreement with multi-billion-dollar company Ricoh.
Over the next 18-months, Mr Graham said the company’s plans to grow MRR to $500,000 per month.
Driving further profitability
In addition to the growing MRR stream, TZ chief executive officer Mario Vecchio said the successful FY2022 was largely attributed to focusing and streamlining sales.
He said another contributor was rebuilding the company’s core technology capabilities after cost reducing efforts in previous years say this ability pared to a bare minimum.
“In 2022, we have begun the process of rebuilding a team capable of developing and maintaining an integrated stack of core software and translating it into use case-based application modules that are readily adaptable to each new client application.”
“As the focus shifts to operational information management solutions, we are also strengthening our application programming interface capabilities to ensure more efficient and painless integration into each client’s own operational software systems.”
Mr Vecchio said he expects the company’s profit growth will be underpinned by its increasing software subscription revenues, along with the scale-out of its TZ Cloud Services.
“One of our top priorities for customer relationship management will be to convert existing and established customer arrangements from perpetual software licencing to MRR-based subscriptions.”
“This increasing familiar approach to servicing for software-driven solutions is both simpler and less costly to manage, and supports a deeper level of integration into customers’ recurring operating budgets,” Mr Vecchio explained.