archTIS Reports Strong Financial Growth in Q4 FY24
AR9 (AR9) Share Update July 2024 Monday 29th
archTIS Reports Strong Financial Growth in Q4 FY24
archTIS Limited (ASX:AR9, OTCQB:ARHLF), a global provider of data-centric software solutions, has announced a robust financial performance for the quarter ending 30 June 2024, showcasing significant revenue growth and reduced operating expenses.
Instant Summary:
- Annual revenue growth of 54%, with a 58% increase in licensing revenue.
- Gross margin percentages increased to 60%, with a 79% expansion in gross margin dollars.
- Annual operating expenses decreased by 18%.
- Positive annual operating cash flow of $1.4M.
- Annual Recurring Revenue (ARR) surpasses $4M.
- Key wins with the Australia Department of Defence and other global defense suppliers.
- Net annual revenue growth of 104% due to customer retention and expansion.
- Two CyberSecurity Excellence Award wins.
- Appointment of Andrew Burns as Chief Financial Officer (CFO) and Co-Secretary.
Financial Performance Overview
archTIS Limited has reported a strong financial performance for the fourth quarter of FY24, driven by significant revenue growth and disciplined cost management. The company achieved a 54% increase in annual revenue, with licensing revenue alone growing by 58%. This growth has resulted in a gross margin percentage increase to 60%, and a 79% expansion in gross margin dollars.
The company also reported a positive annual operating cash flow of $1.4M, a significant improvement from the previous year's cash outflow of $5.3M. This positive cash flow was supported by record cash receipts and a decrease in annual operating expenses by 18%.
Customer and Market Expansion
archTIS has continued to grow in its target markets, securing key contracts with the Australia Department of Defence, Penten for an Australian intelligence agency, and other global defense suppliers. The company also retained and expanded its existing customer base across all geographical regions, leading to a net annual revenue growth of 104%.
In addition to new contracts, archTIS experienced minimal customer churn, with net revenue retention at 104% for the financial year. The company successfully upsold additional NC Protect and Kojensi SaaS licenses to existing customers, including partners in Singapore, the US, South Korea, and Australia.
Technological Innovations and Awards
archTIS's continuous investment in technology and innovation has been recognized with two CyberSecurity Excellence Awards. Kojensi was named the National Cyber Defense category winner, and NC Protect received the Data-centric Security category winner.
Corporate Developments
The company appointed industry veteran Andrew Burns as Chief Financial Officer (CFO) and Co-Secretary. Burns will oversee financial planning and analysis, accounting, taxation, audit and compliance, corporate governance, and enterprise risk management functions.
archTIS also announced a new partnership with Copper River Technologies, a leading provider of information technology solutions and services in the United States. Copper River will resell and provide services for NC Protect, specifically targeting the US Department of Defense.
The significant revenue growth and reduced operating expenses are likely to positively impact archTIS's stock price. The company's strong financial performance and strategic customer wins demonstrate its ability to grow and maintain profitability. The positive cash flow and high net revenue retention are also encouraging signs for investors.
Investor Reaction:
Analysts are likely to react positively to archTIS's financial performance, noting the company's ability to achieve significant revenue growth while reducing operating expenses. The strategic wins in key markets and the recognition through industry awards further bolster investor confidence.
Conclusion:
Investors should keep an eye on archTIS's continued growth and strategic initiatives in the coming financial year. The company's strong financial performance and strategic customer wins position it well for further growth. Investors are encouraged to monitor upcoming announcements and consider the long-term potential of archTIS in their portfolios.