Aiming for Cash Flow Positivity in Fiscal Year 2025, FirstWave Cloud Technology Strives for Financial Success
FirstWave Cloud Technology Limited, a leading provider of network management solutions, has released its financial results for the year ending June 30, 2024. The company has made significant strides in various areas, as outlined below.
Financial Highlights
The company's total revenue for the year was AUD11.28 million, marking a 9.7% decrease from the prior year. Operating costs for the year were reduced by AUD4.17 million to AUD16.82 million from AUD20.99 million in FY23. This reduction in costs has contributed to a decrease in the company's loss for the year, excluding impairments and income tax, which stood at AUD3.08 million, down from AUD5.86 million in the prior year.
CEO Danny Maher expressed satisfaction with the company's progress, particularly with blue chip clients such as Microsoft, NASA, Telmex, and Telstra. He also highlighted the progress towards being cashflow positive in FY25.
Strategic Advancements
FirstWave has made strategic advancements in its pipeline, focusing on converting significant opportunities. The company has not disclosed any new revenue figures, but it has made progress in this area, with the opportunities progressing well.
One of the key strategic moves was the acquisition of 100% of the assets of network automation software company Saisei Networks Inc. The acquisition was completed by issuing 40,571,428 new shares to Saisei as payment.
The company has also extended professional services agreements with key clients such as Telstra for another 15 months and secured extensions for its agreements with NASA and Mexico's largest telecommunications group, Telmex. Telmex was also added as a reseller of FirstWave's industry-leading Network Management Information System (NMIS) platform.
Funding and Appointments
FirstWave raised AUD2.5 million via the issue of convertible notes to Danish asset management and specialist small-cap financier Formue Nord A/S. The institution that made an investment of AUD 2.5 million in the form of convertible notes in 2024 could not be identified in the available search results.
US-based technology executive Daniel Friel was appointed as a Non-Executive Director, bringing valuable expertise to the company.
Focus on Recurring Revenue and Cost Management
Mr. Maher mentioned some deal slippage in FY2024 and the focus is on increasing the company's recurring revenue. To achieve this, the company has made proactive decisions to lower costs and exit unprofitable contracts. Some churn was unwanted, but other parts were intentional.
The company ended the year with annualized recurring revenue at AUD10.06 million, up around 8% from the start of the year. Normalized cash burn (average cash burn per month, excluding non-recurring revenue and assuming no new sales) is now circa AUD280,000 per month, down from circa AUD580,000 per month at the start of the year.
Looking ahead, achieving cash flow positivity in FY25 will require a modest level of sales and no significant churn, according to Mr. Maher. The CEO also looks forward to further growth as a substantial, global technology company.
