Cipherpoint Ltd (ASX:CPT) closed the September quarter with solid revenue, including record monthly revenue of $376,000 in September from its cyber security services platform division operated through Brace168 Pty Limited.
The company enjoyed quarterly revenue of A$990,000 while customer receipts were also up, accounting for a A$156,000 increase from the June quarter to A$895,000.
Contributing to the strong quarterly results were the offloading of intellectual assets to the tune of A$1.2 million in cash and the expansion of the company's pipeline and customer base through subsidiary Brace168.
Strong cash position
Cipherpoint empowers businesses to discover, protect and control sensitive data across multiple platforms. Subsidiary Brace168 builds and delivers IT and cyber security solutions to protect enterprise and business clients, which include market leaders in sectors like banking, finance, property, technology, and health care.
The Cipherpoint Group held A$3.9 million in cash at the end of the quarter, equalling 3.8 quarters of funding available, comfortably above the ASX’s two-quarter guidance.
During the quarter, the company made payments to related parties of A$152,000, which were comprised of usual executive and non-executive director fees, salaries and consultancy payments.
Building product pipeline
Cipherpoint has continued to build its product pipeline which it considers to be strong, reflecting the increased sales and marketing efforts of the company and an increasing demand for cybersecurity and data protection solutions and services.
The global data protection as a service market size was valued at US$11.97 billion in 2019. It is expected to expand at a compound annual growth rate (CAGR) of 31.3% from 2020 to 2027.
During the September quarter:
- Cipherpoint completed the sale of certain intellectual property assets receiving A$1.2 million upfront in cash with another A$200,000 escrowed pending the novation of certain contracts. The elimination of operating expenses consequent on the sale of these assets will be partially offset by an increase in staff in Brace168;
- Brace168 continued to grow its sales pipeline and customer base for recurring and project revenues;
- The company undertook the recruitment of new sales, delivery and technical staff and the Sydney-based team continued a combination of office and remote working arrangements; and
- The refresh and expansion of the company’s Security Operations Centre was substantially completed.
Read: Cipherpoint software assets to come under archTIS’ wings
December quarter and beyond
Cipherpoint (through Brace168) will continue to seek capitalisation on its strong sales pipeline, good partner relationships and new market opportunities by hiring more resources in this next quarter.
CPT intends to deploy its cash to scale the business by both pursuing organic growth and acquiring bolt-on acquisitions. The post quarter announcement regarding the proposed acquisition of Virtual Information Technology Pty Ltd in Tasmania is an example of this strategy.
Read: Cipherpoint to acquire revenue-generating cybersecurity outfit