Tesserent reported increase in turnover for Q3 2023 meets expectations

ASX listed security vendor Tesserent has released its unaudited Q3 results for financial year 2023 (FY2023), for the quarter from January to March.

Tesserent said the Q3 turnover result was $47.5m, increasing 14 per cent since the same quarter last year.

It said this met its expectations and matched its typical annual seasonality profile for that quarter.

The turnover for the financial year to date (YTD) was $132.6m, which is up 27 per cent from the same period last financial year.

The company’s operating earnings before tax for Q3 remained the same as Q3 the previous year, at $3.9m

Tesserent reported that this reflected the margin impact of some continued underperformance in the security operations centre (SOC).

The company said that this reduction also reflects Tesserent’s investment in growing a new Incident Response service offering and costs associated with the SOC.

However, the company believes that remaining the same as the previous year is still an improvement due to increasing utilisation rates across the business.

For the financial year to date, the operating earnings before tax was up 5 per cent since the previous year, at $8.9m.

Tesserent’s SOC signed six new enterprise clients to its managed services in Q3 FY23, and expects it to successfully deliver its financial targets in Q4.

During Q3, Tesserent recorded an operating cash outflow of $2m, as a result of the growth in the company’s unbilled WIPs during the period.

The company said this is reflective of an increase in activity in the consulting business, particularly the government advisory business, and will unwind in Q4 as project milestones are met. Q4 is expected to report strong operating cash inflows in respect of product sales.

Tesserent Academy acquired ALC Group in February this year and, in its first full month since acquisition, ALC delivered a profit of $200k to Tesserent.

ALC Group has also developed and deployed a new certified CyberSec First Responder training course for clients.

Tesserent’s headcount has also grown this past quarter to 496, having recruited 18 new employees in Q3, and 37 employees during the YTD FY23.

Annual recurring revenue has also been maintained at 50 per cent of annual group turnover, which is up 44 per cent from the previous year.