IntelliHR : Half Year Accounts

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18 February 2022

INTELLIHR LIMITED (ASX: IHR)

ASX APPENDIX 4D

For the half-year ended 31 December 2021

The ASX Appendix 4D of intelliHR Limited and subsidiaries (intelliHR) for the half-year ended 31 December 2021 is filed with the Australian Securities Exchange (ASX) under ASX Listing Rule 4.2A.3. It should be read in conjunction with the intelliHR consolidated half-year financial statements and all other information concerning intelliHR filed with the ASX. Information presented for the previous corresponding period is for the half-year ended 31 December 2020 (unless otherwise stated).

RESULTS FOR ANNOUNCEMENT TO THE MARKET		6 months	6 months
			31 Dec 2021	31 Dec 2020
			$	$
Revenue from ordinary activities	Revenue	78%	2,328,531	1,305,628
	increased
Profit / (loss) from ordinary activities	Loss increased	52%	(4,602,230)	(3,033,010)
after tax attributable to members
Net profit for the period attributable	Loss increased	52%	(4,602,230)	(3,033,010)
to members

Refer to the intelliHR consolidated half-year financial statements for commentary on the above results.

Dividends

No final dividend was paid in relation to the year ended 30 June 2021.

No interim dividend will be paid in relation to the half-year ended 31 December 2021.

Net Tangible Assets	31 Dec 2021	31 Dec 2020
	$	$
Net tangible asset backing per ordinary share	0.02	0.01

Controlled entities

No control has been gained over entities during the period.

Associates and joint ventures

There are no associates or joint ventures.

Status of review

The half-year results for the period ended 31 December 2021 have been reviewed. The independent review report is unqualified.

intelliHR Limited | ACN 600 548 516

GPO Box 1839, Brisbane Qld 4001 | P: 1300 993 803 | www.intellihr.com

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intelliHR Limited

ABN 38 600 548 516

HALF-YEAR FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2021

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DIRECTORS' REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Your directors present their report on intelliHR Limited (referred to hereafter as the 'consolidated entity') for the half-year ended 31 December 2021.

DIRECTORS

The following persons were directors of intelliHR Limited during the whole of the half-year and up to the date of this report, unless otherwise stated:

Greg Baynton (Retired 30 November 2021)

Anthony Bellas

Robert Bromage

Ilona Charles

Matthew Donovan (Appointed 30 November 2021)

Jamie Duffield (Retired 30 November 2021)

Belinda Lajoie

David Slocomb

PRINCIPAL ACTIVITIES

The principal activities of the company during the half-year were the development of an innovative cloud- based people management platform.

No significant change in the nature of these activities occurred during the half-year.

REVIEW OF OPERATIONS

The loss for the consolidated entity after providing for income tax amounted to $4,602,230 or $4,197,098 excluding the Share Based Payments adjustment for the issue of employee share benefits during the 6 months. (2020: $3,033,010).

intelliHR has produced three consecutive quarters of record Annual Recurring Revenue (ARR) growth, demonstrating a strong response to market demand with increasing customer size and record enterprise customer conversions driving this growth. The six months to 31 December 2021 saw significant improvements across revenue figures including contracted ARR, cashflow and cash position, customer numbers and subscriber conversion. The key events and results for the period are as follows:

• 117% YoY invoiced subscription revenue growth in 1H22. Total YTD revenue represented an increase of 78% YoY income from $1,305,628 to $2,328,531.
• Increased contracted ARR by a record $1.85M in 1H22 to $5.65M a 101% rise.
• Record Rest of the World contracted revenue growth of $596,674 during 1H22 with Rest of the World ARR now accounting for 31% of total ARR.
• Rolling 12-month net retention rate of 116% representing a strong result driven by customer growth, the Company's value-based pricing model, and continued customer retention.
• 65% YoY increase in contracted professional services implementations which generated $621,439 in 1H22.
• 60% increase in total expenses, up $2,609,722 compared with 1H21, 44% of which is attributable to the Company's global expansion into the USA, Canada and the UK.

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DIRECTORS' REPORT (CONTINUED)

REVIEW OF OPERATIONS (CONTINUED)

• Increased contracted subscribers by a record 14,858 to a total of 52,138 as at 31 December 2021. During 1H22, the business surpassed the 50,000 contracted subscriber and $5m in contracted ARR key milestones.
• Continued building of intelliHR's best-of-breed partner ecosystem with over 90% of revenue growth including an ecosystem component. These recent results underscore the importance of intelliHR both supporting and informing customer integration needs. Through the new Integration Marketplace, intelliHR continues to actively expand the reach of its best-of-breed partnerships, leveraging the network effects from its expanding global ecosystem. Specific initiatives include intelliHR having a formal reseller agreement with UK payroll supplier, Cintra, which is producing exciting customer leads and acquisitions along with a commercial agreement for entry into the ADP marketplace in the US and Canada following finalisation of integration work.
• Completion of a successful and over-subscribed capital raising in 1H21 which generated $10.8M in capital net of fees. These funds will contribute to continued and expanded investment across strategic growth activities.
• Undertaking of further product development into large-scale data management and core HR record keeping enablement projects, including:
  o Continue key front-end technology transformation to support the extension of language translation in the platform, opening up new geographic markets. Initial languages rolled out included French Canadian, French, English (US) and Spanish. Additional languages to be added as customer demands support investment.
  o A range of scaling and self-service onboarding initiatives including an automated billing system and customer facing data upload automation.
  o The extension of intelliHR's public API which increases endpoints and functionality extending the potential range of integration possibilities with enterprise payroll systems and the best-of-breed HR ecosystem around intelliHR as core.
  o Further investment in R&D into analytics and AI to deliver additional functionality including insight generation to underpin business decision-making.
  o Significant technology transformation projects were undertaken and completed to increase platform performance for larger enterprise data sets and improving user experience.

STRATEGIC OUTLOOK

Looking forward, the company is excited to build upon the successes of 2021 with customer conversions over 500 headcount accelerating faster than any other segment. intelliHR's success is drawn from its innovative and configurable HR platform which has proven to be quickly adaptable to the needs of individual organisations across the globe. It has continued to invest into efficiently scaling sales operations through a range of product initiatives including reseller, partner ecosystem and foreign language capabilities increasing both the size and scale of its addressable market.

• intelliHR has firmly established a strong platform for global SaaS HR success over the course of 2021. It has continued to invest in building its global coverage in both the North American and UK markets. With three global enterprise conversions during 1H22, and the addition of the Cintra partnership already generating new leads strengthening our existing pipelines, this investment is being appropriately rewarded.

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DIRECTORS' REPORT (CONTINUED)

REVIEW OF OPERATIONS (CONTINUED)

• intelliHR's growing 'best of breed' partner ecosystem is increasingly underpinning its success, with over 90% of contracted ARR growth in 1H22 having an integration with an ecosystem partner.
• The Company will continue to adapt its offering at all levels of business to service the increasing opportunity for scale offered by enterprise demand. The range of customers intelliHR now supports incorporate 50 to 10,000 employees, are multilingual and are located across the globe.
• The Company will continue to develop emerging reseller technology partnerships creating a new scalable distribution channel.

COVID-19 Impact:

intelliHR has remained productive and engaged during the COVID-19 pandemic, having demonstrated an ability to seamlessly transition to a remote working environment as the pandemic requires. The Company's growth has accelerated since the onset of the pandemic with intelliHR well-positioned to support the global shift to hybrid and "Work from home" arrangements. Through the intelliHR platform, organisations can better manage, support and engage their employees using continuous feedback tools, performance enablement and wellness capabilities, while also accounting for new challenges such as vaccination compliance.

In closing, the business is strongly positioned to proceed with its innovative research and development program in tandem with its global expansion strategy, equipped with:

• A historically high cash position.
• A well-established and proven market fit with the enterprise customer segment.
• A rapidly growing 'best of breed' partner ecosystem.
• Increased and growing cash receipts from customers.
• Growing contracted ARR (subscription fees).
• Rising professional services revenue.
• A market-leading platform that competes successfully on a global scale and across large employing organisations with its AI and analytical capability.
• A strong board with experience across all aspects of management, finance and technology.

SUBSEQUENT EVENTS OCCURRING AFTER THE REPORTING DATE

The Group has no matters or circumstances that have arisen since 31 December 2021 that have significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in future financial years.

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