Redknee has witnessed a year of significant growth and new revenue opportunities that were achieved through both the disciplined acquisition, and through continued organic growth. This has enabled us to become the largest, independent provider of real-time converged billing and charging solutions for communications service providers.
Fiscal 2013 resulted in an increase in recurring revenue, constituting 55% of total revenue compared to 50% in the year prior. Order backlog increased by 130% to $160 million from $70 million at the end of the previous year, supporting the development of our long-term growth strategy. According to analyst firm Gartner, the annual spend of telecom software sector is expected to grow in 2014, and with our expanded scale and integrated solution portfolio, we feel we are well positioned to capture an increasing share of this spend.
Redknee’s key objectives this year have been the disciplined integration of our latest acquisition, ensuring both employee and customer retention by continuing to offer a great value proposition. We have been working as one organization since April 1st 2013, and I am very proud of how our team has come together. Our employees are now more engaged and passionate about their work than ever before and together we are demonstrating our commitment to our customers by providing an innovative quality solution that will help them profitably grow their business. Because of this we have retained all of our customers since the acquisition was closed and are honored to now be supporting more than 200 customers with over 2 billion subscribers across over 90 countries.
In 2013, we completed a number of notable achievements across three main areas of our business:
Throughout this year, our long-term growth strategy has remained consistent:
At Redknee, we have achieved an important milestone in our combined product roadmap - providing a clear path that fully leverages all the technologies and software in its portfolio. With continued investment in our software platform, Redknee has over 125 patents granted and more than 70 patents-pending. We have demonstrated our product’s full virtualization and real-time capabilities in networks that exceed 20 and 50 million subscribers, while scaling our software to support some of the worlds’ largest service providers. Our cloud billing offering continues to attract investment from companies across the globe.
In addition to the 135 customers gained from acquisition, we continue to see a level of interest and engagement from prospectively larger customers. We have advanced our efforts around adjacent vertical markets, including the ability to monetize the ‘Internet of Things’ and the utility sector, especially in electricity where smart grid investment is accelerating across the globe. We demonstrated our solution for the utilities space at the Oracle Open World in San Francisco at the end of September 2013. We see great growth opportunity for Redknee in this space over the coming years.
Redknee’s recurring revenues for 2013 were primarily comprised of support and SaaS licensing fees. On a trailing twelve month basis, this resulted in $78M, or 55% of total revenues. We see additional opportunities for increasing the value of our mission-critical support services, while providing more opportunities for Software-as-a-Service across our customer base over the coming 24-36 months.
In summary, we have made excellent progress executing on our short term priorities and integration efforts, and across our long term growth strategies. We are encouraged by the momentum we’ve established in 2013 and we expect to complete our business acquisition integration in 2014 and accelerate our growth as we move into 2015.
I invite you to attend our Annual General Meeting of Shareholders, which will be held on March 6, 2014 at The TMX Broadcast Centre, The Exchange Tower, 130 King Street West, Toronto, Ontario commencing at 10am.
On behalf of our Board and the entire management team, I would like to thank our employees, partners, customers, investors and shareholders, along with the financial community, for their support in 2013. We look forward to sharing another exciting year ahead.
Yours Sincerely,
Lucas Skoczkowski
Chief Executive Officer