8common : Appendix 4C and Activity Report

ASX Release

22 April 2022

3QFY21	2QFY22	3QFY22	% Change (vs pcp)
Total Revenue ($Ak)	835	1,007	1,095	+31.1%
SaaS & Transaction Revenue (A$k)	634	695	714	+12.6%
Number of users (k)	164	174	177	+7.9%
ARPU - Federal Government (A$)	$36.68	$32.24	$32.39	-12.0%
ARPU - Total (A$)	$16.39	$16.06	$16.18	-1.2%

Record Monthly SaaS Revenue in March 2022

March 2022 Quarterly Report and Appendix 4C

Fintech company 8common Limited (8common or the Company) (ASX: 8CO), is pleased to release its consolidated quarterly cashflow and business update for the quarter ended 31 March 2022 (3Q FY22).

Key financial highlights for 3Q FY22 include:

• ▪ Quarterly SaaS and transaction-based revenue of $714k, up 12.7% on the previous corresponding period (pcp) which included a monthly all-time high of $248k in March 2022

• ▪ Total revenue of $1,095k, up 31% versus pcp driven by implementation revenue from GovERP work packages

• ▪ Strong recovery in trip numbers and travel activity as business travel returned with international borders re-opening on 21 February 2022.

• ▪ $1,024k in cash receipts and operating cash outflow of $551k reflecting the continued investment in CardHero which will complete by the current quarter and expenditure associated with the early work packages of the GovERP project work

• ▪ Annualised Recurring SaaS and transaction Revenue (ARR) of c.$3.0million at 31 March 2022

• ▪ Average ARPU for the quarter of $16.2. ARPU is expected to grow in coming periods driven by a return to normalised business conditions and continued growth in users

• ▪ Cash balance at 31 March 2022 was $3.8m (31 December 2021: $4.9m) providing sufficient capital for 8CO to continue executing on growth strategies

Key operational highlights include:

• ▪ Ongoing rollout of the Federal GovERP work packages which to date have a cumulative value of over $1.4 million (inc-GST). Implementation revenue from the contracts will continue to be recognised in Q4 FY22 with the associated SaaS transaction and recurring revenue commencing in 1H FY23

• ▪ Agreement with Westhaven, a not-for-profit, community-based charity supporting communities with disabilities and NDIS (National Disability Insurance Scheme) provider for both CardHero and Expense8 solutions

• ▪ Contract Extension and upgrade with Federal Department of Industry, Science, Energy and Regulation (DISER) signed post end of the period with a 1 year TCV of $384k inc GST. The extension is an upgrade on the current contract and includes the addition of new modules such as travel and GovComply modules

• ▪ Contract extension with long term customer, Rabobank, post end of period, for a further 3 years

8common CEO, Andrew Bond said "The all-time high monthly SaaS revenue of $248k generated in March, coinciding with the return of travel and business activity, are important milestones for the Company. We are very well positioned to deliver strong SaaS revenue growth with increasing Expense8 users driven by GovERP and the CardHero expansion with the customers such as Life Without Barriers rollout and Westhaven."

"We are at the tail-end of our product investment for the current cycle which will see project based spending decrease by the end of the current quarter. The expansion of group-wide support resources to cater for the growth associated with the CardHero and GovERP programs will continue. With an additional 63 mandated entities and over 110k users to onboard to Expense8 in coming years (not including the opt-in entities), the GovERP work package represents a significant driver of revenue growth and shareholder value.

"We remain well funded to drive the implementation of GovERP and roll out of CardHero and we expect both to deliver considerably to our revenue growth across the remainder of FY22 and beyond."

Financial and operational review

The Company delivered quarterly SaaS revenue of $714k, up 13% versus the pcp, with total revenue for the quarter of $1,095k.

The number of users on our platforms continues to increase to over 177k (up over 8% over the past 12 months) reflecting the scale of our offering.

During the quarter, 8CO signed its second CardHero contract with not-for-profit community-based charity, Westhaven Limited. The contract is for an initial 3 years (with an option for a 2-year extension) for the provision of 8common's CardHero integrated card payment solution, including the Company's leading expense management solution, Expense8.

The rollout of CardHero with its inaugural customer, Life Without Barriers remains on track. The contract incorporates an implementation fee of $150k and approximately $500k per annum in transaction fees.

During the quarter CardHero contributed $23k of recurring SaaS and transaction revenue out of $714k total SaaS and transaction revenue for the quarter. Revenue levels will grow considerably in coming quarters as the Life Without Barriers rollout plan progresses.

The GovERP work package continues to progress (ref ASX release 14 January 2022). The total value of signed contracts to date under the GovERP is over $1.4 million (inc-GST) and encompasses onboarding seven existing customer entities and the pre-onboarding consultation for eight new entities onto the GovERP version of Expense8. This collectively incorporates over 10,500 users (of which more than half are new users), onto the GovERP version of the Expense8 travel & expense management platform. During the quarter approximately $350k of implementation revenue was recorded from the GovERP work package. Recurring and SaaS transition-based revenue is expected to commence in early FY23, with 8CO currently generating a Federal Government ARPU of $32 (was $42 pre COVID).

Total revenue $1.3m

1.00

1.10

$1.0m

1.06

1.04

1.00

1.01

0.97

$0.8m

$0.5m

0.90

0.88

0.92

0.93

0.82

0.85

0.78

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

FY19

FY19

FY20

FY20

FY20

FY20

FY21

FY21

FY21

FY21

FY22

FY22

FY22

Recurring SaaS & Transaction revenue

$0.8m

Q2

Q3 FY19

Q4

Q1

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

FY19

FY20

FY20

FY20

FY20

FY21

FY21

FY21

FY21

FY22

FY22

FY22

The company continues to focus on costs and expenses. Staff, administration, and corporate costs were $1,558k for the quarter, up from $872k in the previous quarter given the increase in investment in CardHero, the GovERP rollout and other corporate costs during quarter.

Payments to the Directors of the entity, comprising of salaries and fees for Executive and Non-Executive Director, totalled $95k during the quarter (see section 6 of the Appendix 4C). No other payments were made to any related parties or their associates of the entity.

The Company generated a net operating cash outflow of $551k for Q3 FY22 due to the investment associated with the development of CardHero and implementation costs associated with the Federal GovERP work package.

The company has a strong cash position of $3.8 million as at 31 March 2022.

Cash Flow performance

$2.0m

1.52

-0.55 -0.67 -$1.0m

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

FY19

FY19

FY20

FY20

FY20

FY20

FY21

FY21

FY21

FY21

FY22

FY22

FY22

Cash Receipts

Net Operating Cash

Outlook

The Company continues to expand its presence amongst government and large enterprises, reflected in the increasing number of users across our two solution platforms. With a growing presence within Federal Government via the GovERP initiative, the Company is positioned to drive a significant uplift in SaaS revenue from early FY23 onwards.

The CardHero and CardHero+ products are a significant engine of growth and will further expand the client and revenue footprint of the Company. The signing of our second CardHero customer reflets the scalability of the solution and we anticipate CardHero will continue to attract further entities in the coming periods.

With a dedicated team, robust financials and strong pipeline of Expense8 and CardHero growth opportunities, the Company has established a solid platform for continued growth over the remainder of FY22 and beyond.

Further information

Corporate	Investors
Nic Lim	Craig Sainsbury
[e-mail]	[e-mail]
Executive Chairman
About 8common Limited

8common (ASX:8CO) solutions deliver enterprise grade financial transaction processing for government entities and large enterprise businesses. Its flagship Expense8 platform is a leading pureplay provider of end-to-end travel expense management software, card application and management. The innovative software solutions improve organisation, productivity, incorporate company organisational policies and expense auditing to reduce fraud. Expense8 by 8common was named a Major Player in the IDC MarketScape: Worldwide SaaS and Cloud-Enabled Travel and Expense Management Applications 2019 Vendor Assessment.

Its new product CardHero (pre-paid card fund distribution) delivers a closed loop solution to support regulated, large network and high volume requirements. 8common specialises in large enterprise and government segments.

Its growing client base of more than 177,000 platform users include enterprise customers Woolworths, Broadcast Australia, Amcor, and over 158 state and federal government entities. For more information, visithttps://www.8common.com/