TZ Limited posts 18% increase in monthly recurring revenue
TZ Limited says it remains on track to grow MRR by 50% year-on-year.
TZ Limited (ASX: TZL) posted a 18% increase on its monthly recurring revenue (MRR) for the September quarter (Q1 FY2023), as it continues to entrench itself as a “world leading” software provider in the smart locker space.
By the end of Q1 FY2023, TZ’s MRR had reached $308,000, which was an 18% rise on Q4 FY2022.
TZ continued to focus on onboarding customers to its TZ Cloud service, with 29 new or renewed subscriptions for the period.
Cash receipts for the period were $5.8 million – up from $5.37 million in Q1 FY2022.
TZ narrowly missed its top-line revenue target for the period, which came in at $4.9 million – making up 94% of the budget forecast.
However, the company stated it remains on track to grow its MRR by 50% year-on-year.
Transition to software company
Driving the expected MRR increase is TZ’s transition from a smart lock hardware company to software.
As part of this, the company’s software licencing division continues to scale with an expanding partner base.
“The ability to scale by having the partners building their own hardware systems allows TZ to integrate the software solution that brings both enablement of the system and, more importantly, provides the applications and workflows that solve real customer requirements,” the company explained.
Software upgrades
In transitioning to software, TZ said it is continuing to upgrade its offering.
It is expected the upgrade of its software stack will take 12 months to complete, which has accounted for higher support costs.
The company anticipates these costs will reduce around the middle of next year once the upgrades are complete.
New product launch
During Q1 FY2023, TZ launched its OPeL product. The new product allows TZ software to operate on third party hardware and locking systems.
TZ expects the new product will open new markets. Pre-selling of OPeL kicked-off in July, with first shipments due to arrive in December and January.
“TZ expects a significant cost benefit from OPeL through the simplification of installation, configuration, and ongoing maintenance,” the company stated.
New board member
Chartered accountant Duncan McCulloch joined TZ’s board during Q1 as a non-executive director.
Mr McCulloch previously worked for Deloitte and McGrathNicol, and has “extensive experience and a substantial record of achievement” in optimising value and implementing divestment solutions.