8common Posts 5% SaaS Revenue Growth and 33% Cost Reduction in Q3 FY25
8common Limited reported a record Q3 FY25 SaaS and transaction revenue of $1.1 million, alongside a 33% reduction in operational costs, supported by technology upgrades and a $1.5 million financing facility.
- Q3 FY25 SaaS and transaction revenue up 5% year-over-year to $1.1 million
- Total revenue for the quarter reached $1.5 million despite seasonal softness
- Operational costs cut by 33%, with administration and corporate expenses down 45%
- User base grew 3% quarter-over-quarter to 186,000 with ARPU up 10% year-over-year
- Cash position stable at $0.1 million, backed by a $1.5 million unsecured loan facility
Strong Revenue Growth Despite Seasonal Headwinds
Fintech SaaS provider 8common Limited (ASX: 8CO) has reported a record quarterly performance for Q3 FY25, with transaction and recurring SaaS revenue reaching $1.1 million. This marks a 5% increase compared to the previous corresponding period (PCP), underscoring steady growth in its core Expense8 platform despite the traditionally slower March quarter due to holiday season and reduced government travel expenses.
Total revenue for the quarter stood at $1.5 million, reflecting the company’s ability to maintain momentum in a challenging seasonal environment. The user base expanded by 3% quarter-over-quarter to 186,000 users, while average revenue per user (ARPU) rose 10% year-over-year to $26.76, signaling improved monetisation efficiency.
Operational Efficiency Drives Cost Reductions
A key highlight of the quarter was a significant contraction in operational costs by 33% compared to PCP, primarily driven by a 45% reduction in administration and corporate expenses. These savings were largely attributed to infrastructure and technology upgrades implemented during and after the holiday period, which enhanced operational effectiveness and lowered overheads.
CEO Andrew Bond emphasised the strategic deployment of AI tools across business development, support, and product development functions as a catalyst for these efficiencies. This focus on technology-driven cost management positions 8common well for sustainable growth and margin improvement.
Stable Cash Position Supported by Executive Financing
Despite a net operating cash outflow of $54,000 for the quarter, cash receipts from operations remained robust at $1.7 million. The company’s cash balance held steady at $0.1 million, underpinned by a $1.5 million unsecured financing facility provided by Executive Chairman Nic Lim. This facility, with a 6% interest rate and maturity at the end of 2025, ensures adequate funding runway for ongoing operations and strategic initiatives.
CardHero, 8common’s prepaid card fund distribution solution, continued to contribute positively with $108,000 in recurring SaaS and transaction revenue, maintaining its cashflow positive status.
Government Contracts and Pipeline Outlook
Operationally, 8common onboarded new customers including the Net Zero Economy Agency and the National Commission for Aboriginal and Torres Strait Islander Children and Young People. The company also completed the Federal Government Travel and Procurement Payment Services (TAPPS) transition to NAB payment cards, a complex configuration across all clients.
However, the upcoming Federal Government election has temporarily slowed business development activities, with expectations for a rebound post-election in mid-May 2025. The company’s reseller partnerships continue to strengthen, promising meaningful pipeline growth.
With approximately 193,000 potential federal government users in its onboarding pipeline, 8common is well positioned to capitalise on government sector digitisation trends once political uncertainties subside.
Bottom Line?
8common’s blend of revenue growth, cost discipline, and strategic financing sets the stage for a pivotal Q4 as government contract momentum resumes.
Questions in the middle?
- How will the Federal Government election outcome impact 8common’s business development pipeline?
- Can 8common sustain its recent cost reductions while scaling user growth and revenue?
- What are the prospects for CardHero’s contribution to overall profitability in the coming quarters?
