Back to back record quarterly sales result
This morning, our small cap telco investment Vonex (ASX:VN8) produced another strong quarterly result, underlined by revenues increasing 81% year-on-year (YoY) to a new record $10.5M.
The previous record was delivered last quarter, with $10.2M in revenues, obviously a pleasing trend for shareholders.
The robust financial results provide an endorsement of the company’s aggressive acquisition strategy, namely: Voiteck (acquired January 2022), the Direct Business (August 2021), Nextel (February 2021) and 2SG (March 2020). These acquisitions have accelerated customer acquisition and expanded VN8’s national footprint, feeding into the increases in sales and revenue.
Another key metric we track is annual recurring revenue (ARR), which basically indicates the amount of revenue that a company expects to repeat. As at 30 June 2022, VN8 has an ARR of ~$36.2M, up 97% YoY.
With VN8 capped at ~$23M - well below its ARR - and cash at bank of $3.2M at the end of the quarter, we like the prospects for a positive market re-rate in the year ahead.
Also of significance during the quarter, VN8 entered a binding heads of agreement with Commonwealth Bank-backed telco provider, More to become its exclusive provider of Hosted PBX services to new and existing CBA customers.
VN8 will also deliver a new hosted PBX and IP telephony enablement platform for More's new and existing small to medium enterprise (SME) customers. We expect this to positively impact ARR through new license fees, hardware and call carriage.
The quarterly results bodes well for our key objectives we’d like to see VN8 achieve this year:
Following today’s results, we plan to provide a more detailed update on VN8 in early August.
