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archTIS (ASX:AR9) bolsters quarterly revenue alongside higher spending

Josh Smith

5 hours ago

archTIS (ASX:AR9) - CEO & Executive Director, Daniel Lai - The Market Herald

Source: Balance the Grind

Cybersecurity company archTIS (AR9) posted a sturdy increase in quarterly revenue over the first quarter of 2021 as software licence sales rose

In its latest quarterly report, the company highlighted $1.25 million in total revenue — an 84 per cent rise on the December quarter of 2020

The revenue growth was
by strong annual recurring revenue from software licencing, according to archTIS, which made almost $422,000

Managing Director and CEO Daniel Lai said the company made strategic investments into sales, marketing and product innovation over the “record-breaking quarter”

However, this meant archTIS spending increased by 95 per cent over the March quarter to just over $2.1 million

Still, with $12 million in the bank at the end of March, archTIS has enough funds to last several more quarters at current cash burn levels

Shares in archTIS closed 3.7 per cent higher this afternoon at 28 cents each

Cybersecurity company archTIS (AR9) posted a sturdy increase in quarterly revenue over the first quarter of 2021 as software licence sales rose.

In its latest financial report, archTIS highlighted $1.25 million in total revenue — an 84 per cent increase compared to the December 2020 quarter. This represents a year-on-year revenue increase of a whopping 776 per cent.

The company said the increase in revenue was driven by strong annual recurring revenue from software licensing, which accounted for almost $422,000 of total revenue.

The company offers secure information sharing and identity management software to universities, government organisations, the defence sector and more.

The strong revenue result translated to a gross profit of $802,000, which is 57 per cent higher than the December quarter last year.

archTIS Managing Director and CEO Daniel Lai said March 2021 was a “record-breaking quarter” for the company.

“We continue to have a clear line of sight toward future aggressive growth trends in revenue while making key strategic investments in sales distribution, market awareness and product innovation,” Daniel said.

Since completing the acquisition of global information protection specialist Nucleus Cyber in December 2020, archTIS said the company has ramped up its global sales distribution strategy to continually deliver customer growth.

To help with this, archTIS expanded its executive team over the March quarter and worked to create greater market awareness for its products and services.

Nevertheless, while revenue grew quickly, spending grew quickly, too. archTIS’s operating expenses for the quarter came in at just over $2.1 million for the quarter, up 95 per cent from the quarter before.

While this is a reflection of the new acquisition and greater investment into sales and marketing, the result was a net-negative cashflow result of roughly $700,000 for the March quarter.

Still, with $12 million in the bank at the end of March, archTIS still has enough funding to see it through several quarters of operations at current cash burn levels.

Shares in archTIS closed 3.7 per cent higher this afternoon at 28 cents each.