K3 Business Technology (KBT ), a provider of software solutions to fashion and apparel brands, announced the signing of a large software license contract for its flagship K3 Fashion product.
The 3-year contract was signed with a "global luxury apparel group" and is valued at €1.6m. K3 said the customer was acquired in January 2022 via its partner network. At that time, the customer bought €30k of software licenses in a 12-month contract covering the piloting of the product. After the pilot, the customer chose to expand the contract significantly.
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A major win for K3 Business Technology, the signing of the €1.6m SaaS contract propelled K3 shares up nearly 10% in London today. The undisclosed "luxury brand" customer expanded its pilot deal to become K3's largest ever software licensee contract, as its sales process closely matched K3's offering.
K3 Fashion is an enterprise solution, based on Microsoft Dynamics 365. It was developed specifically for the fashion and apparel industry, and includes modules that address customers' sustainability issues, including supply chain traceability.
The new contract significantly increases the total value of K3's annualised recurring contracts. In a January 2023 trading update, K3 reported adjusted EBITDA for FY22 of no less than £5m, compared to £4.4m in FY21. Net cash was expected to be £7.1m, compared to £9m in FY21. Cash flows in 2H benefited from a 98% renewal rate of product licence and maintenance and support renewals. Final results are expected later in March 2023.
Overall, K3 remains well funded to continue its momentum in the ever growing SaaS market.
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