Shares in the cyber security company are heading backwards today on its FY21 results.
The post Archtis (ASX:AR9) share price slips on $3.3 million loss appeared first on The Motley Fool Australia. –
Right now, the Archtis share price is 33.5 cents, 2.9% lower than its previous close.
Archtis share price slumps despite 743% revenue increase
Here’s how the cyber security provider performed through FY21:
$4.6 million of revenue, 743% more than that of FY20
Loss before tax of $3.3 million
Earnings before interest, tax, depreciation, and amortisation (EBITDA) came to a loss of $1.5 million, still a 44% improvement on that of FY20
$3.1 million of profit, a 1,159% increase
The company’s annual recurring revenue over FY21 was $1.9 million, 681% more than in FY20.
It also received cash receipts worth $7.4 million, 846% more than it did in the previous period.
Archtis ended the period with $12.7 million in cash.
What happened in FY21 for Archtis?
Here’s what drove the Archtis share price in FY21:
Archtis announced its plans to acquire and merge with Nucleus Cyber in October. The merger took place in December.
The merger expanded Archtis’ footprint in North America, Europe, the Middle East and Africa.
It also produced cross-selling opportunities with Nucleus Cyber’s existing product offering within the Microsoft Corporation‘s (NASDAQ: MSFT) software suite.
Archtis also secured its largest deal ever in FY21. That was was with the Australian Department of Defence and is worth $4.2 million.
Then, in the fourth quarter, the Department of Defence bought two multi-year contracts worth a total of approximately $1.4 million for the licensing of NC Protect. The defence department will use Archtis’ software to secure information collaboration across the Microsoft suite.
What did management say?
Archtis’ chair Dr Miles Jakeman commented on the results driving the company’s share price today, saying:
Financial Year 2021 (FY21) will go down as a bittersweet period for the company as we entered into new global market opportunities. Amongst the personal loss and economic challenges experienced by hundreds of millions of people across the globe, Archtis is pleased to deliver a transformational and record-breaking financial year.
Archtis’ financial performances this year was substantially higher in every single reporting metric…
Remote work has brought new challenges to collaboration and has exposed a broader need around security; particularly associated with breaches and loss of sensitive information originating from employees and contractors (insider threats). Nation-states, corporate espionage and human error have exponentially added to the challenges global organisations are facing in securing their data. The old security model is broken and archTIS is leading the way toward new and innovative methodologies that make collaboration more secure, easier to use, simple to deploy and scalable.
What’s next for Archtis?
Investors focused on the Archtis share price in FY22 should keep an eye out for these developments:
The company is planning to continue driving towards triple-digit growth in annual reoccurring revenue in FY22.
It’s also going to focus on creating superior products and capture a larger global market share. It will be looking out for acquisition opportunities to expand its product offerings.
Archtis will continue working on pipeline opportunities with Microsoft, Thales, Raytheon, and other partners.
Finally, the company has pointed to MarketsandMarkets research that shows the global data-centric security market’s size will increase from US$3,460 million in 2020 to US$9,763 million by 2026.
It’s safe to assume Archtis is hoping to get a slice of that exceptional growth.
Archtis share price snapshot
Despite today’s fall, the Archtis share price has gained 8% year to date. However, it has dropped 31% since this time last year.
Should you invest $1,000 in Archtis right now?
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.
Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Microsoft. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.