GTH
Gathid LTD
ASX
Appendix 4C and Quarterly Activities Report
Sentiment:
Quarterly Report
4 November 2024 8:00 PM
Gathid Ltd. reported a 71% surge in Annual Recurring Revenue (ARR) to $1.2 million in Q1 FY25, driven by four new customers, including a Fortune 500 company, but faces ongoing uncertainty regarding the finalization of a previous business sale.
Worse than expected
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.
Delay expected
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.
Summary
- Gathid Ltd.'s Annual Recurring Revenue (ARR) increased by 71% to $1.2 million in the first quarter of fiscal year 2025 (FY25).
- This growth was fueled by the addition of four new customers, including a significant Fortune 500 company.
- The new customers contributed over $365,000 in new ARR.
- Sales revenue for Q1 FY25 reached $272,000, up from $169,000 in the previous quarter.
- The company ended Q1 FY25 with $6.78 million in cash and cash equivalents, down from $7.44 million in Q4 FY24.
- Gathid is still working to resolve a dispute over the final payment from the sale of its physical security business, creating uncertainty about the final amount due.
- The company's operating cash outflow decreased in Q1 compared to Q4, primarily due to increased customer receipts.
- Gathid has made some strategic hires to support its growth and plans for further headcount increases.
- The company is attending the Australian Cyber Conference and is a finalist for the AISA Start-up of the Year award.
- Gathid's ASX listing is pending resolution of the dispute and the submission of a business spending model.
Sentiment
Score: 6
Explanation: While the company shows strong revenue growth and positive customer acquisition, the unresolved dispute significantly dampens the overall sentiment. The positive aspects are balanced by the uncertainty and potential negative financial impact of the ongoing legal issue.
Positives
- 71% increase in ARR to $1.2 million in Q1 FY25
- Acquisition of four new customers, including a Fortune 500 company
- Increased sales revenue in Q1 FY25 compared to the previous quarter
- Finalist for the AISA Start-up of the Year award
- Participation in the Australian Cyber Conference to expand sales pipeline
Negatives
- Ongoing uncertainty regarding the finalization of the physical security business sale
- Decrease in cash and cash equivalents from Q4 FY24 to Q1 FY25
- Pending resolution of the dispute with the buyer of the physical security business before ASX relisting
Risks
- Uncertainty surrounding the final payment from the sale of the physical security business could impact future operations and financial stability.
- The delay in resolving the dispute could affect the company's ability to provide the ASX with the required business spending model and maintain its ASX listing.
- While the company has a strong sales pipeline, the success of future growth depends on converting sales opportunities into contracts.
Future Outlook
The Board is generally pleased with the progress made in Q1 FY25, particularly the addition of four new enterprise customers, and is confident in the company's sales pipeline and marketing strategy for continued growth. However, the ongoing challenges related to the completion of the physical security business sale remain a concern.
Management Comments
- 'We are thrilled to be selected as a finalist for the AISA Start-up of the Year award. This recognition reflects our commitment to innovation and excellence.'
- 'In the first quarter of FY25, we increased our Annual Recurring Revenue (ARR) by 71% to $1.2 million, up from $0.7 million at the end of FY24. We are excited about the future and remain committed to delivering exceptional value to our customers and shareholders.'
Industry Context
Gathid operates in the cybersecurity and identity governance software market, a sector experiencing significant growth. The company's success in attracting new customers, including a Fortune 500 company, suggests strong demand for its platform. However, the ongoing dispute related to the sale of its physical security business highlights the challenges and risks inherent in mergers and acquisitions within the industry.
Next Steps
- Resolve the dispute over the final payment from the sale of the physical security business.
- Submit the required business spending model to the ASX for relisting.
- Continue to grow the client base through sales negotiations and marketing activities.
- Attend the Australian Cyber Conference to further build the sales pipeline.
Key Dates
- 21 September 2023: Completion of the sale of the physical security businesses
- 29 February 2024: Announcement to the ASX regarding dispute with buyer
- 19 April 2024: Announcement to the ASX regarding dispute with buyer
- 27 June 2024: Expert determination process concluded for the dispute
- 30 September 2024: End of Q1 FY25
- 5 November 2024: Date of the 4C Quarterly Activity Statement & Business update release
Keywords
Annual Recurring Revenue, ARR, Software, Cybersecurity, Identity Governance, Fortune 500, ASX Listing, Sales Growth, Cash Flow, Business Sale
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.
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