How did the cybersecurity provider Tesserent (ASX:TNT) fare in Q2 FY2021?

Summary

  • Tesserent Limited has reported impressive Q2 FY2021 numbers with 41.7% growth in sales compared to Q1 and a massive 248% growth in operating EBITDA.
  • The Company entered the New Zealand cybersecurity market through a joint venture with Optic Security and Lateral Security acquisition.
  • The Victoria-headquartered would look for & realise cross-selling prospects between business units.

Tesserent Limited (ASX:TNT), a leading provider of end-to-end cybersecurity services, has released its quarterly activities report and provided operational update for the December quarter. TNT’s board highlighted that the Company continues to perform as per the management estimations.

  • During the quarter, sales increased by 41.7% compared to the previous quarter to reach A$21.4 million. Adding iQ3 full-quarter turnover and the historical H2 seasonal sales increase, the group turnover run-rate is over A$110 million (annualised).

  • Operating EBITDA reached A$1.4 million, a massive jump of 248% compared to Q1 FY2021.

  • The Company collected customer receipts of over A$20.6 million, up 38% on Q1.
  • The cash and cash equivalent by the end of Q2 stood at A$7.9 million, down A$5.8 million from Q1 FY2021. This was because of the vendor payments made during the second quarter to acquire their businesses and acquisitions-related costs.

Inclusion of  TNT on All Tech Index

In Q2 FY2021, TNT was included in S&P/ASX All Technology Index after the solid overall market performance during 2020 coupled with substantial growth across the Group.

Entry into NZ cybersecurity market

  • The Company took the first step towards its entry in the NZ cybersecurity market. It announced the strategic acquisition of New Zealand-based Lateral Security and a JV with Optic Security.
  • TNT expects to update the market soon on the conclusion of the Lateral Security acquisition and further future acquisitions at an advanced level.

Business Integration

TNT is exploring and realising cross-selling prospects between business units. During Q2, TNT won over A$3 million as a direct result of cross-selling opportunities. It comprises of:

  • Several deals in Federal, State as well as Local Government.
  • Numerous deals that have services from various companies that have joined the TNT group.

Do Read: Tesserent’s (ASX:TNT) Federal Government division’s earnings exceed expectations, shares move up

FY2021 Outlook

  • Provide Cyber 360 capabilities to a rising number of Australian businesses.
  • Combine acquisitions to increase synergy efficiencies plus drive organic revenue growth via cross-selling.
  • Capture market share in Government (including Defence), Critical Infrastructure and Banking & Finance sector.
  • Drive its acquisition strategy to increase on Cyber 360 capabilities plus increase shareholder value via incremental EPS growth.
  • Build out high-value recurring annuity revenue sources.
  • Increase proprietary intellectual property to make high-margin product & service offerings.
  • Look for Global expansion prospects.

Stock Information: At AEDT 12:53 PM, TNT shares were trading at A$0.340, down 2.858% from its previous close.

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