K2fly Limited (ASX: $K2F) reports 25% revenue growth in H1FY24

K2fly Limited (ASX: $K2F) has reported a 25% revenue growth in the first half of the financial year 2024 (H1FY24). The company's revenue reached $6.8m, representing a significant 25% increase compared to the same period in the previous year. The revenue growth is attributed to the successful delivery of the Group's growth strategy, which is focused on tier-1 and tier-2 global mining companies.

Executive Commentary on H1FY24 Performance

The Company's growth trajectory continued in H1FY24, with revenues growing 25%. Cost of sales increased by 16% to $3.6m due to the growing client base, inflationary pressures, and growth in the overall service capacity of the business. The Company's focus on cost management is crucial in the current highly inflationary environment. Other costs grew by 20% to $6.2m, primarily due to the reallocation of roles and investments in the software development function to support the implementation of K2fly's product release process. Capital expenditure on internal development costs declined by 59% to $0.6m, primarily due to the conclusion of the project to develop the Company's new Resource Disclosure solution. The Group reported a loss after tax for H1FY24 of $2.8m, which included non-cash share-based payment expenses for options issued to staff and directors, as well as non-cash amortisation expenses.

Summary of H1FY24 Results and Outlook

In summary, K2fly's revenue growth of 25% in H1FY24 reflects the successful execution of its growth strategy focused on tier-1 and tier-2 global mining companies. The Company's operating environment is characterized by strong industry fundamentals and tailwinds in Environmental, Social and Governance (ESG), including anticipated regulatory changes. K2fly's focus on cost management in the current inflationary environment is evident, with a decline in capital expenditure and a strong emphasis on predictability, development efficiencies, and scalability. The Company's strategic review to maximize shareholder value is underway, with a broad assessment of strategic investment, merger and acquisition opportunities, partnerships, and other potential corporate activity. K2fly's ability to continue as a going concern is dependent on generating additional revenues from its operations, reducing costs, and, if necessary, raising further capital or drawing down on the working capital facility. The Company's cash reserves at the end of H1FY24 were $2.5m, and it had access to a working capital facility with an undrawn balance of $2.0m. There have been no significant changes in the state of affairs of the Group during the half-year ended 31 December 2023, and no significant events have occurred after the balance date that may affect the operations or the state of affairs of the Group in future financial periods.