FirstWave slashes losses, eyes cashflow positive 2025

ASX-listed metwork management and cybersecurity software group FirstWave Cloud Technology Limited said it has made strides towards its goal of becoming cashflow positive in FY25, as shown in its full-year results for the period ending 30 June 2024.

The consolidated entity's loss after income tax and excluding impairments fell to $3.08 million, a marked improvement from the previous year's $5.86 million.

This reduction comes on the back of a substantial focus on operational improvements and synergies, which saw operating costs drop by $4.17 million to $16.82 million.

FirstWave reported total revenue of $11.28 million for the year, down 9.7 per cent from FY23, primarily due to one-off non-recurring revenues in the previous financial year.

The company's "normalised cash burn" - roughly equating to average monthly cash burn, excluding non-recurring revenue and assuming no new sales - now stands at about $280,000 per month, a significant reduction from approximately $580,000 per month at the start of the year.

Danny Maher, FirstWave's chief executive officer, said the company had undergone significant organisational and operational changes during the year.

"FirstWave today is a very different company to the one it was when it acquired Opmantek in 2022," he said. "

"Our key, short-term objective has been to make the company cash flow positive for FY25."

"We are in a position now where achieving this goal will require only a modest level of sales and no significant churn," Maher added.

The company's focus on increasing recurring revenue (ARR) saw it end the year at $10.06 million, up around 8 per cent from the start of the year.

While acknowledging some deal slippage in FY2024, Maher expressed optimism about the company's progress with blue-chip clients such as Microsoft, NASA, Telmex and Telstra.

During the year, FirstWave completed several key transactions, including the acquisition of network automation software company Saisei Networks.

The company also raised $2.5 million through the issue of convertible notes to Danish asset management and specialist small-cap financier Formue Nord.

FirstWave extended its professional services agreement with Telstra for a further 15 months and renewed its NMIS agreements with both NASA and Telmex, with the latter also becoming a reseller of FirstWave's Network Management Information System platform.

As FirstWave continues to navigate the competitive landscape of network management and cybersecurity software, its focus on operational efficiency and strategic partnerships appears to be laying a solid foundation for future growth and profitability.