Cyber revenue close to half of Spirit Technology Solutions sales in H1 FY25

ASX-listed Spirit Technology Solutions has posted revenue of $50.3 million in H1 of FY25, up from $43.7 million in the first half of FY24.

Cyber revenue was up 97% to $14 million, growing from just 5% of segment earnings in H1 FY23 to close to half (46%) of the business in H1 FY25.

This cyber revenue includes the contribution of Infotrust for the six-month period, and Forensic IT from the date of effective control (1 October 2024 to 31 December 2024). 

Spirit’s cyber security investment accelerated with the acquisition of Forensic IT in August, providing it with enhanced capabilities and opportunities for cross-sell opportunities.

The H1 FY25 results follow the company’s 'strongest Q4 in its history' reported in July of last year.

Managed Services returned to positive earnings momentum, up $0.1 million in underlying EBITDA (uEBITDA) from a negative $2.5 million in the previous year’s first half.

A focus on stabilising and restructuring this segment means that the Managed Services segment is “tracking to the Board’s expectations with further improvement expected in H2 FY25”.

Spirit also noted a focus on investing and providing customers with opportunities to align to SMB 1001 - the new security framework - with tailored security packages to enable customers to invest at the appropriate level for their current needs and progressively increase that investment over time.

In the communication and collaboration segment, ongoing segment investment to facilitate growth opportunities and market offerings impacted H1 FY25 uEBITDA, which was down slightly to $3.3 million from $3.5 million in H1 FY24.

Spirit said there’s a focus on expanding this sales channel and footprint by establishing new locations in Western Australia and South Australia.

The company's earnings were more heavily weighted to the second half of the financial year, and it expects that its earnings for H2 FY25 will be higher than H1 FY25, with the strategic focus being to extract the revenue and margin accretion opportunities following the acquisition of Infotrust and Forensic IT. 

During the financial half-year Spirit adopted a change to its revenue accounting policy, undertaking further review of its application of principal vs agent pursuant to AASB 15 Revenue from contracts with customers in regard to certain product revenue streams.

This review resulted in a change to the Group’s revenue accounting policy to present certain product revenues on a net basis, including a restatement of comparatives. There was no effect on the reported net profit/(loss) for the current and comparative half-year periods, Spirit stated.