Encryption vendor Senetas puts in mixed half-year results

Cybersecurity and encryption vendor Senetas has reported a 21.5 per cent increase in consolidated group revenue to $16.4 million for the half-year ending 31 December 2024, but it also recorded a net loss after tax of $1.4 million for the group.

The ASX-listed cybersecurity company completed the sale of its Votiro business to Menlo Security in February 2025, a transaction with a base value of US$37.5 million (approximately A$60 million).

Senetas now holds a 57.8 per cent shareholding in Votiro Cybersec Global, with sale proceeds comprising 40 per cent cash and 60 per cent shares in Menlo.

The deal includes potential for additional value if certain conditions are met, though up to US$17.2 million of the consideration may be held back for a minimum of 12 months.

Senetas segment revenue increased by 2 per cent to $9.5 million, while Votiro segment revenue jumped 66 per cent to $6.9 million during the period.

Profitability showed improvement in both segments, with Senetas segment profit before tax rising 31 per cent to $1.9 million and Votiro's loss before tax decreasing by 41 per cent to $5.6 million.

The group maintained a solid cash position of $8.8 million at 31 December 2024, with no debt.

Gross margins remained strong across the business, with the consolidated group gross margin steady at 89 per cent.

Maintenance and subscription recurring revenue increased by 28 per cent to $5.3 million, accounting for 56 per cent of total Senetas segment revenue.

This growth was supported by initial payments from a major Middle Eastern government contract.

Operationally, Senetas experienced growth in customer sales through partner Thales, partially offset by reduced inventory transfers as Thales lowered its holdings.

The company is currently working on upgrades to its 10 Gbps encryptors and a new version of the 100 Gbps encryptor, as well as re-certification for North America.

Votiro's revenue growth was primarily driven by the Asia Pacific region, with efficiency initiatives leading to a 15 per cent reduction in overhead expenses.

The company reached cash flow breakeven in December 2024, a significant milestone.

Despite the revenue increases, consolidated net assets were negative $6.0 million at the end of the period.

This negative position reflects Votiro's accumulated losses offsetting Senetas's profit, though the Senetas segment maintained positive net assets of $43.3 million.

"The completion of the Votiro transaction with Menlo Security was a key recent development," Andrew Wilson, Senetas CEO, said.

He added that the core Senetas business achieved modest revenue growth but strong profit growth, with recurring revenue assisted by the first contribution from a large Middle Eastern government customer.

Looking ahead, Senetas expects good customer sales to continue throughout FY2025, with solid sales pipeline momentum.

The company anticipates increasing investment related to embedding encryption on autonomous vehicles and potential AUKUS projects.