Workplace software provider Vault Intelligence (ASX: VLT) has secured a five-year, multi-million dollar contract with ADT Security New Zealand for the supply of its Vault Solo product.
The five-year contract has a minimum value of $6.8 million with a minimum $1.36 million expected in contracted annual recurring revenue (CARR).
Vault expects this will help it meet its minimum market guidance of $10 million CARR by the end of the 2020 financial year.
The company’s CARR value for the period currently sits at $8.3 million.
Vault Solo workforce management ecosystem
Launched in August 2018, Vault Solo is a workforce management “ecosystem” which uses mobility and internet of things (IoT) devices such as smart watches to ensure employee safety, while adding time-saving and productivity tools to complement the core product.
Comprising the Solo Platform, Solo Mobile and Solo Wearable, the system manages and protects the safety of workers onsite and out in the field by staying in contact with them through regular check-ins, movement monitoring and automatic alerts.
ADT Security provides security services for New Zealand’s commercial and residential market including 24/7 monitored burglar alarms and smoke detectors, smart security, lifestyle technology, and closed-circuit TV systems.
Vault chief executive officer David Moylan said the new contract would complement ADT’s existing portfolio.
“This agreement is further evidence of the tremendous capability and potential of Solo, particularly in the security sector,” he said.
“We are delighted to be working with ADT and look forward to exceeding their expectations so that we extend [our services] beyond Australia and New Zealand.”
September quarter results
In addition to the ADT contract, Vault posted the delivery of approximately $1 million in new CARR for the first quarter of the 2020 financial year, representing a 116% increase on the previous corresponding period.
Total customer cash receipts also increased on the previous period by 13% to $1.26 million, while total net cash receipts are expected to continue growing in Q2 2020 through increased customer cash receipts and the receipt of $533,000 in research and development funds.
A capital raising carried out in the September quarter has also boosted the company’s cash reserves going into Q2, with $7.16 million received earlier this month.
A cash burn of $2.04 million was predictably high for the September quarter, with annual subscriptions, staff-related costs and roll-out of a strategy to invest in accelerating CARR and revenue growth and product development.
The company invested an additional $175,000 in growth activities and an extra $460,000 on product development, primarily on Solo, compared to the same quarter last year.
The cash burn is expected to “reduce materially” in Q2 2020.
Since May 2019, a string of major Solo contracts totalling $14.1 million with $3.3 million CARR were executed, demonstrating a “building momentum” for Solo sales.
“The qualified and well-progressed sales pipeline generated for the Vault Enterprise and Solo product lines are at record levels,” the company reported.
“Significant opportunities have been progressed to the stage where new material-sized deals for [both products] are expected to be converted throughout the upcoming and future quarters.”
At midday, shares in Vault were up 7.35% to $0.365.