Cirata plc

Today, I want to walk you through Serata's results for the first half of our 2025 financial year and share how we're positioning the business for long-term success. I'm pleased to report that in the first half of 2025, Serata delivered solid growth. Revenue rose to 4.8 million, up from 3.4 million a year ago, an increase of over 40%. Bookings increased to $3.8 million, a 58% year-on-year rise. Importantly, our cash overheads fell to $8.5 million, a sharp reduction from the $11.8 million of last year. This improved efficiency has had a real impact. There is further evidence of operating leverage. Our adjusted EBITDA loss halved, moving from $8.6 million loss last year to a $4 million loss this period. As at the end of June, we held $6.1 million in cash with a further $1.3 million in receivables, giving us the cash plus receivables position of $7.4 million as we move into the second half of the year. So we're encouraged by our progress we've made in reducing costs, focus in the business and strengthen in our balance sheet. However, we still have to deliver results and consistent scalable growth with an emphasis on new logos and new customer names. A major driver of the growth and momentum is our data integration business, which is the core focus for Serata's future. Bookings in this segment reached $3.1 million, up over 200% year on year. During the first half, we signed 20 contracts, including our first enterprise-wide license agreement with one of the world's top 20 retailers, a renewal with a top five Canadian bank, and a new partnership win through our collaboration with Databricks. This first half momentum comes on the heels of our Q4 FY24 announcement of our contract with the top US bank. Q4 FY24 and Q1 FY25 were $3 million bookings quarters, and this level of performance showed some early signs of recovery. However, we need to demonstrate quarterly progress. And this was not the case with the Q2 results where we've expressed our disappointment. Successful sales into highly complex enterprise environments with our LiveData Migrator product is hugely encouraging. LDM LiveData Migrator addresses a real pain point for our customers. However, I'm not satisfied with the speed of execution, particularly as it relates to new customer acquisition. We know we need to execute better both direct with the customer and working with our partners. We continue to strengthen our strategic partnerships and in the second quarter, we signed an agreement with Microsoft Azure as part of their storage migration program. This opens up a new channel for bringing our live data migrator product to more enterprise customers worldwide. In addition, we're pleased with our first DMaaS project data migration is with Databricks and a new partner for Serata. As we exit the first half year, we continue our momentum. In August, we took an important strategic step by completing the divestiture of our DevOps assets to Blue Optima. This transaction will yield up to $3.5 million in cash and importantly allows us to focus entirely on data integration, where we see the greatest growth potential for the company. The company was subscaled to compete effectively with two totally different product sets into two totally different buyer communities. So along with this, we've taken decisive actions to align our cost base with our growth strategy. By the end of the third quarter, we expect our annualized cash overheads to be in the range of $12 to $13 million, down from $16 to $17 million earlier in the year, and over 70% lower than the peak levels of two years ago. I know we still have much to prove, but it's encouraging to see the early operating leverage with increase in revenues with a cost base of less than one third of the peak. The company's challenges have been well documented and we've been transparent during the rescue and recovery phases. The top priority after hardening the product for enterprise workloads is the go-to-market, GTM as we call it. The company has failed to deliver consistent, high-performance sales and marketing execution. Since I joined, pretty much the whole of the go-to-market team has changed. As a result, I'm very pleased to welcome Dominic Hikari as our new Chief Revenue Officer, who is appointed in July. Dominic brings four decades of enterprise software experience, and he's already making an impact by strengthening our sales execution in both North America and international markets. Our outlook remains unchanged from the guidance we shared earlier this year. We expect bookings to be weighted towards the second half of the year, with strong growth in data integration continuing. We remain confident that with the actions taken, divesting non-core assets, cutting costs and focusing on execution, we will not require further working capital fundraise in FY25. Our focus is for the data integration business to continue at triple-digit growth. Strategically, we've been working hard on looking at future enterprise data modernization demands. And as a consequence, we're broadening the applications of our live data migrator product, expanding into new use cases for large data modernization. This includes leveraging open table formats like Apache Iceberg and advanced orchestration capability that will serve enterprises undergoing digital transformation to become an AI centric enterprise in an AI centric world. This will be covered extensively in some new product announcements in the second half of 2025. which will expand the total addressable market and position Serata for category leadership in the emerging data orchestration market. To sum up, the first half of FY25 shows that Serata is on a path to sustainable growth. Revenues and bookings are growing. Costs are coming down and our data integration business is gaining momentum in some of the biggest brand name consumer companies in the world. Already, Dominic Hikari is having a positive impact on customer engagement, pipeline build and lead generation. The demand for artificial intelligence and advanced analytics is in creating an unprecedented need for secure, scalable, vendor neutral data movement. Serata is uniquely positioned to meet that demand. Finally, I want to thank our shareholders for your continued support, our customers for your trust and commitment, and our colleagues for their passion and energy. Together, we are building a stronger, more focused Serata, one that is set to exit FY25 on a clear growth trajectory. Thank you.

So turning to a short Q&A now. Stephen, the first half of 25 is now complete. How's the scorecard looking relative to your plan coming into the year?

We had a very strong first quarter. In fact, it was the strongest start for the company since 2019. We're also pleased to land our first enterprise-wide license contract with a major UK retailer and our first data migration project through Databricks. But our Q2 performance missed our internal plan. Despite a weak Q2, our first half data integration bookings were up over 200%. I'm also pleased that operating leverage is beginning to become very apparent. We've taken a lot of cost out of the business in the last couple of years, and this is always a challenging process. But we're growing revenues year on year on now one third of the cost base. Also, I would add on the subject of leverage that the divestment of DevOps also signals further cost optimization and an important focus on data integration for the whole company. As we exit Q3, we can expect cash overheads to reduce further to between $12 and $13 million from its current $16 to $17 million per annum.