GTH
Gathid LTD
ASX
Annual General Meeting Addresses and Presentation
Sentiment:
Annual Report Presentation
20 November 2024 8:05 PM
Gathid Limited reported a FY24 profit after tax of $4.3 million, driven by the sale of its RightCrowd business, despite a net loss from its Gathid identity governance platform business and ongoing disputes with the buyer.
Delay expected
The finalization of the sale of the RightCrowd businesses has been delayed due to an ongoing dispute with the buyer, Bloom.
The audit of Gathid's FY24 financial accounts has been delayed due to Bloom's failure to provide necessary documents to the auditors.
Worse than expected
The company's overall profit was driven by the sale of its RightCrowd business, masking a significant loss from its core Gathid business.
The ongoing dispute with Bloom regarding the sale of RightCrowd and potential further claims creates significant uncertainty and financial risk.
The auditors' inability to provide an unqualified opinion on the financial statements due to lack of access to information from Bloom indicates a significant shortcoming in the financial reporting process.
Summary
- Gathid Limited's FY24 results showed a profit after tax of $4.3 million, primarily due to the sale of its RightCrowd physical identity businesses.
- However, the company's Gathid identity governance platform business reported a net loss after tax of $3.39 million.
- Gathid's annual recurring revenue (ARR) increased by 73% year-over-year, exceeding A$1.2 million as of June 30, 2024.
- The company is involved in a dispute with Bloom, the purchaser of RightCrowd, regarding the final sale consideration, with Bloom claiming an additional $666,891.
- Gathid also received a letter from Bloom outlining eight potential claims under the Share Purchase Agreement (SPA).
- The company's auditors were unable to reach an opinion on the financial results related to the RightCrowd business due to lack of access to necessary documents.
- Gathid's listing on the ASX is under review due to the unresolved issues.
- The company aims to maintain a cash balance above $5 million by the end of June 2025.
Sentiment
Score: 4
Explanation: While the company reported an overall profit, significant challenges remain, including a loss-making core business, a major dispute with a buyer, and uncertainty regarding its ASX listing. These factors significantly dampen the overall positive sentiment.
Positives
- FY24 profit after tax of $4.3 million
- 73% year-over-year increase in ARR, exceeding A$1.2 million
- Successful new customer acquisition across multiple countries and sectors
- Positive media coverage in Forbes, Dark Reading, and Security Info Watch
- Finalist for Australia's Cybersecurity Startup of the Year
- Strategic partnerships expanding global reach
- Strong growth in North America, now contributing over 50% of ARR
Negatives
- $3.39 million net loss after tax from Gathid business
- Ongoing dispute with Bloom over sale consideration of RightCrowd business
- Eight potential claims received from Bloom under the SPA
- Auditors unable to reach an opinion on RightCrowd business financial results
- Uncertainty regarding ASX listing
- Narrowly missed cash balance target of $8 million
Risks
- Ongoing dispute with Bloom could impact future cash flow and financial reporting.
- Potential claims from Bloom under the SPA could lead to further financial losses.
- Uncertainty regarding ASX listing creates risk to shareholder value.
- Gathid business is in its start-up phase and is currently loss-making.
- The company's financial statements are subject to qualification due to the unresolved issues with Bloom.
Future Outlook
Gathid expects to continue expanding its ARR and leverage strategic partnerships to scale sales and marketing efforts, aiming to maintain a cash balance above $5 million by June 2025. The company plans to continue investing judiciously in the business.
Management Comments
- 'This financial year has been both satisfying and disappointing to the Board.'
- 'The Gathid identity governance platform business is in its start-up phase and therefore has to necessarily invest in resources and infrastructure in advance of revenue generation.'
- 'The Board believes that the value of the Gathid business has grown by at least the amount spent on its operations and is satisfied with progress to date and the Gathid business prospects.'
- 'The Board is disappointed that the finalisation of the sale to Bloom has not been able to be resolved to the satisfaction of both parties.'
- 'Reflecting on the objectives set at our last AGM, despite narrowly missing the cash balance target, the advancements across these key areas have met our expectations, affirming our strategic direction.'
Industry Context
Gathid operates in the rapidly growing global Identity Governance and Cybersecurity markets, addressing the increasing demand for simpler, cost-effective solutions to reduce 'identity debt'. The company's success highlights the growing need for robust identity management solutions in a complex IT environment, competing with traditional IAM providers by offering a more agile and dynamic approach.
Next Steps
- Resolve the dispute with Bloom regarding the RightCrowd sale.
- Continue to grow ARR and expand into new markets.
- Maintain a cash balance above $5 million by June 2025.
- Consider whether Gathid should remain listed on the ASX.
Key Dates
- June 30, 2023: Company's ARR was $0.55 million
- Late 2023: Bloom provided a completion statement indicating an adjustment amount owed by Gathid
- June 2024: Expert issued determination regarding the dispute between Gathid and Bloom
- November 21, 2024: Date of the Annual General Meeting (AGM)
- Next week (relative to November 21, 2024): Gathid returns to CyberCon as a finalist for Australia's Cybersecurity Startup of the Year
- Earlier this week (relative to November 21, 2024): Roundtable with PwC and their customers in Singapore
- June 2025: Target date to maintain a cash balance above $5 million
Keywords
Gathid, Identity Governance, Cybersecurity, SaaS, Annual Report, Financial Results, ASX, Bloom, RightCrowd, ARR
GTH
Gathid LTD
ASX
Sector: Software & Services
Filings with Classifications
Better than expected
16 April 2025 7:19 PM
Quarterly Activity Statement & Business Update
- The company's ARR growth of 142% indicates better than expected performance compared to the end of FY24.
Delay expected
23 January 2025 10:41 PM
Quarterly Report
- The company is waiting for the resolution of a dispute over the sale of its physical security business before relisting on the ASX.
- The audit opinion in respect of the FY24 Financial Statements may require further actions by the ASX before any relisting takes place.
Better than expected
23 January 2025 10:41 PM
Quarterly Report
- The company's ARR growth of 12% in the quarter and 92% since the end of FY24 is better than expected.
- The company secured two new customer contracts and maintained a high renewal rate, which is better than expected.
- Sales revenue increased from $272k to $390k, which is better than expected.
Worse than expected
21 November 2024 5:50 PM
AGM Results
- The 'first strike' against the remuneration report indicates that the company's compensation practices did not meet the approval of a sufficient number of shareholders.
Worse than expected
20 November 2024 11:15 PM
Annual General Meeting Results
- The rejection of several key resolutions, including the remuneration report, incentive plan, and placement facility, indicates worse-than-expected results from the AGM.
Capital raise
20 November 2024 11:15 PM
Annual General Meeting Results
- The rejection of the 10% placement facility suggests that securing additional capital may be more challenging than anticipated.
Delay expected
20 November 2024 8:05 PM
Annual Report Presentation
- The finalization of the sale of the RightCrowd businesses has been delayed due to an ongoing dispute with the buyer, Bloom.
- The audit of Gathid's FY24 financial accounts has been delayed due to Bloom's failure to provide necessary documents to the auditors.
Worse than expected
20 November 2024 8:05 PM
Annual Report Presentation
- The company's overall profit was driven by the sale of its RightCrowd business, masking a significant loss from its core Gathid business.
- The ongoing dispute with Bloom regarding the sale of RightCrowd and potential further claims creates significant uncertainty and financial risk.
- The auditors' inability to provide an unqualified opinion on the financial statements due to lack of access to information from Bloom indicates a significant shortcoming in the financial reporting process.
Delay expected
4 November 2024 8:00 PM
Quarterly Report
- The finalization of the sale of the physical security business has been delayed due to a dispute over the final payment calculation, impacting the company's ability to provide the ASX with the required information for relisting.
Worse than expected
4 November 2024 8:00 PM
Quarterly Report
- The unresolved dispute regarding the final payment from the sale of the physical security business represents a significant negative deviation from expectations, creating uncertainty and delaying the company's ASX relisting.
Worse than expected
18 October 2024 1:15 AM
Suspension Notice
- The announcement details numerous companies failing to meet reporting deadlines, resulting in potential delisting, which is significantly worse than expected performance.
Capital raise
16 October 2024 6:58 PM
Notice of Annual General Meeting
- The company is seeking shareholder approval for a 10% placement facility, allowing it to issue equity securities up to 10% of its issued share capital over a 12-month period.
Delay expected
30 July 2024 12:04 AM
Quarterly Activity Statement
- The resolution of the dispute over the consideration due for the sale of the physical security businesses is delayed.
Worse than expected
10 July 2024 2:15 AM
Market Announcement Long Term Suspended Entities
- The document indicates that numerous companies have failed to meet their reporting obligations, which is worse than expected for market compliance.
Delay expected
10 July 2024 2:15 AM
Market Announcement Long Term Suspended Entities
- The document lists numerous companies that have delayed lodging required periodic reports.
Worse than expected
20 June 2024 7:12 PM
Release to ASX
- The expected cash balance is lower than the previously announced target.
Delay expected
20 June 2024 7:12 PM
Release to ASX
- The FY23 R&D Tax Incentive claim will be received after 30 June 2024.
- The FY23 income tax return submission is delayed due to the expert determination process.
Delay expected
19 April 2024 3:11 AM
Business Update
- The expert determination process regarding the dispute with Bloom is ongoing.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.