TZ Limited’s New SaaS Revenue Model Reaps Rewards as FY2022 Adjusted EBITDA Soars 831%

TZ Limited posted its first after-tax net profit for fiscal year 2022 of $42,896.

Smart locker technology and software company TZ Limited (ASX:TZL)’s annual report for fiscal year 2022 (FY2022) is evidence of the company’s success in creating an innovative new revenue stream , with adjusted earnings before interest, depreciation and amortization (EBITDA) soaring 831% for the period.

The company today disclosed that adjusted EBITDA for fiscal year 2022 climbed to nearly $1.3 million from $137,364 for fiscal year 2021.

As a result, TZ recorded a net profit after tax of $42,896, up substantially from a loss of $1.66 million in the prior corresponding period.

The company’s profitability resulted in a 31% increase in revenue to $21.4 million.

TZ non-executive chairman Peter Graham said the company’s biggest positive step in fiscal 2022 was building the software platform revenue stream.

“The management team has developed a product that is well accepted in the market.”

He said monthly recurring revenue (MRR) had increased to $260,000 per month, with another $26,000 to be added in the short term.

That extra $26,000 a month comes from TZ’s recently announced deal with multi-billion dollar company Ricoh.

Over the next 18 months, Mr Graham said the company plans to increase the MRR to $500,000 per month.

Increase profitability

Besides the growing flow of MRR, TZ chief executive Mario Vecchio said the success of fiscal 2022 was largely attributed to efforts to focus and streamline sales.

He said another contributor was rebuilding the company’s core technology capabilities after cost-cutting efforts in previous years said that capability was reduced to a bare minimum.

“In 2022, we began 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 easily adaptable to each new client app.”

“While the focus is on operational information management solutions, we are also enhancing our application programming interface capabilities to ensure more efficient and simpler integration into each customer’s operational software systems.”

Vecchio said he expects the company’s earnings growth to be supported by rising software subscription revenue, as well as the scaling of its cloud services TZ.

“One of our top CRM priorities will be to convert existing and established customer agreements from perpetual software licenses to MRR-based subscriptions.”

“This increasingly familiar approach to maintaining software solutions is both simpler and less expensive to manage, and supports a deeper level of integration into customers’ recurring operating budgets,” explained Mr. Vecchio.

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