- Data analytics company Skyfii (SKF) has released an unusually-confident report amid the ongoing coronavirus panic
- Not only is Skyfii claiming to maintain quarter-on-quarter growth over the next few months, but the company reaffirmed its last earnings guidance
- Skyfii claims its success comes from its software-as-a-service business model
- Further, the company is receiving higher-than-normal data analytic requests as businesses try to work out the impact of COVID-19 on their operations
- Skyfii shares gained a healthy 36.36 per cent and closed worth nine cents each
Data and marketing specialist Skyfii (SKF) has joined the list of companies shaking off COVID-19 and seeing consistent growth in an era of economic volatility.
The company told shareholders today it’s expecting positive quarter-on-quarter and year-on-year growth as the third quarter of the financial year approaches.
Furthermore, in what’s become an unusual move, Skyfii has reaffirmed its previous earnings guidance of $6 million in recurring revenue. The company said it will maintain a positive full-year operating earnings before interest, tax, depreciation and amortisation (EBITDA) despite the struggling economy as countries around the globe head into lockdown
This begs the question: how can Skyfii continue to operate so strongly as businesses around the country struggle?
Software as a constant
A lot of Skyfii’s income — and confidence in the next few months — comes from its business model.
The company works in data collection and helps large venues figure out behavioural patterns, numbers, and customer expectations.
All done through cloud-based technology, Skyfii’s says its revenue mix is heavily skewed towards software-as-a-service (SaaS) recurring revenue. Essentially, the company signs clients on for three-to-five-year terms with a monthly subscription fee.
This means that a large chunk of Skyfii’s clients is already signed on and paying regular instalments. Over the first half of the 2020 financial year, recurring revenue made up 65 per cent of Skyfii’s total revenue.
Crucial counting
However, it’s not just Skyfii’s recurring revenue model keeping it afloat.
The company claims to have received a higher-than-normal rate of requests from both new and existing customers over the last two weeks as businesses seek out analytics to make more well-informed business decisions.
As the coronavirus puts some major pressure on company managers, those in charge are after all the data they can get to ensure they make the right choices.
Further, while venues like hotels and leisure centres have been shut down, Skyfii services healthcare centres, grocery stores, and government buildings too. According to the company, these areas of business are receiving much higher than normal traffic.
Skyfii CEO Wayne Arthur said given the current uncertain economic climate, the company is staying on its toes and ready to take necessary steps to keep itself afloat.
“Our strong cash position and balance sheet allow us to continue to operate efficiently and our flexible operating model allows us to scale our business inline with customer demand,” Wayne said.
“Whilst some of our customers are experiencing lower levels of venue activity, others such as healthcare facilities, municipalities, and grocery outlets are experiencing much higher levels of visitation. Our business model of providing accurate data insights to our customers is needed now more than ever to enable them to access accurate and business-critical data,” he explained.
The company has $2.7 million in cash on hand and $1.9 million in undrawn loan facilities. According to Skyfii, this available cash balance means it’s happy to go about business as usual for now.
After today’s confident report, Skyfii shares gained a healthy 36.36 per cent and closed worth nine cents each.
On February 21, shares were worth 22 cents each, meaning the company has still fallen victim to the panic-driven COVID-19 sell-off. Time will tell if the company’s confidence will be enough to overshadow the looming economic fear for investors.