Company Interview / Kinatico's record revenue

Michael Ivanchenko, CEO of Kinatico (ASX: KYP) shares insights on the company's solid start to FY25, with a 10% revenue increase. He observes strong demand for their compliance management software, which simplifies daily regulatory tasks, reducing the administrative burden for organisations. This demand fuels revenue growth as the tools are increasingly adopted.

Michael highlights Kinatico's (ASX: KYP) expanding global interest, driven by momentum in the Australian market. Though no immediate international expansion is on the horizon, he considers future growth prospects promising. He remains positive about sustained revenue performance, as market indicators suggest their strategy is on track for continued success.

Kinatico's (ASX: KYP) $10 million cash position and 59% CAGR in their SaaS growth engine are recognised. Despite recent share price jumps, Michael expresses satisfaction but notes the firm is materially undervalued. The acquisition of Bright People Technologies boosted their strategy, and upcoming self-service features and AI-driven predictive compliance tools aim to accelerate growth and enhance customer onboarding.

Full unedited transcript below:

0:00

Regulatory compliance company. Connecticut has reported a robust start to full year 25. CEO Michael Ivanchuk

0:08

joins me now. Excuse me, Michael, great to have you with us. Just want to take a step back. For those who are not familiar with your company, what it is you actually do,

0:17

that is a provider of a software platform that helps organizations simplify their compliance management on a day to day basis to make sure that at a time when regulatory and expectations and obligations are going up, compliance management can be done without getting in the way of business. So it looks like you've had a good start to full year 25 revenue up 10%. Tell us how you achieved that.

0:43

So we're seeing strong demand across all sectors just in that uh, core offering of uh, getting the admin burden or the amount of time organizations need to spend every day on their compliance. Uh, taking care of that for them with a whole range of software tools, and introducing more and more intelligence across all of those tools to really lift the burden. And, uh, the more they deployed, the more they used within an organization. We're seeing a corresponding lift in revenue. So you are growing your position. How are you, um, faring in terms of some of your global expansion plans?

1:24

It's, uh, without getting too much away at the moment, I was going to say that those, uh, conversations have actually accelerated in the last quarter. We are on the back of the momentum we've seen in the Australian market. We have started receiving considerable interest in, uh, from the international markets. So without setting an expectation on timing or, uh, that anything is going to happen on that in the immediate term, it's certainly reinforced our view that our, uh, longer term future growth is going to be international. And does that mean that when we see your half year results, they can be potentially quite looking quite good too, because we of course, we're already into the second quarter. And as we mentioned, your first quarter was actually record revenue.

2:09

It was. And look, there's no reason to think that we won't continue on the same, uh, trajectory. Everything we're seeing in terms of market indicators has, uh, has us believing that not only is our strategy correct, but there is absolutely no reason why it won't continue on its current path. Now, we've seen a big jump in your share price as well. And I know because CEOs tell me all the time they can't control the market. But you must be happy to see that. Um, what do you think in terms of, I guess, where you see potential further growth and further value for shareholders?

2:44

Uh, look, just just spot on. I'm actually quite happy today that we did see a bit of a jump, uh, when sometimes we've announced news and haven't seen, uh, the effect. But we also strongly believe that we are materially undervalued for the offering we have with not only with $10 million of cash in the bank. Profitable, cash accretive and SAS growth engine is growing at 59% CAGR. So we believe we're on the start of that curve and our challenges to make sure that we get the word out so as many investors as possible know about it. So helping to do that here on us beers. But I noted that one uh, one stockbroker analyst I should say Taylor Collison they've got a price target of $0.15. So they say you've got a solid performance and promising outlook here at $0.12 at the moment. Um, tell us, I guess, what other strategic moves are in play for you. Because a few years ago you bought Bright People Technologies.

3:40

We did. And look, the the big push that I've been talking about recently is to get us into that acceleration phase. Now that we've established the the validity of the initial strategy after the acquisition of bright, to move into compliance is about accelerating the the our ability to bring new customers on at the moment. It is taking us somewhere between four and sometimes up to ten weeks for a new organisation to go live with. Our platform will be introducing a whole range of features and functions this year to help with self-service and also some intelligence around predictive compliance tools that organisations can use. So we believe that will not only allow us to bring them on faster, but also some material growth. And speaking of intelligence, how much are you using or adopting? I think it is an increasing part of our strategic view in what we can do, not only in the way our systems operate, but also

4:40

building AI tool sets for organisations to use to help move into predictive compliance. Uh, management having I actually point out areas that they feel should be looked at ahead of time, uh, to actually assist before issues actually arise. So we actually see tremendous opportunity in using the toolset across AI across our platform.