Q3 Trading Update and Outlook

Cirata PLC

09 October 2024

 

9 October 2024

Cirata plc

("Cirata" or the "Company")

Q3 Trading Update and Outlook

Cirata plc (LSE: CRTA) today announces an unaudited trading update for the quarter ended 30 September 2024. A recorded video interview with Stephen Kelly, CEO of Cirata, where he discusses Q3 FY24 and progress of the business to date can be found here.

Summary

·    Bookings for Q3 2024 of $1.7m were in line with Q2 2024 and Q3 FY2023

·    Guidance retained for FY24 bookings at $13-$15m, YTD $4.1m

·    $983,010 renewal of Data Integration ("DI") disaster recovery use case for a global insurer

·    16 contracts signed, of which 8 contracts relate to Data Integration

·  Retirement of unutilized prepaids of $1.7m that will help pipeline development, GTM activities and conversion

·    Release of Live Data Migrator ('LDM') 2.6 with initial support for Apache Iceberg

·    On track to achieve $20m annualised cost run rate as we exit FY24

·    Cash position of $12.9m as at 30 September 2024

·    Post quarter end; strengthened board, with the appointment of two Non-Executive Directors

Trading Update

Bookings in Q3 2024 were $1.7m (Q3 2023: $1.7m), with the business mix driven by DI growth, accounting for 82% of bookings and DevOps software accounting for 18% of bookings.

In total, 16 new contracts were signed in the quarter of which 8 were DI (Q3 2023: 4 DI).

Renewals secured in the quarter for DI included the Health Care Service Corporation ('HCSC') for a value of $983,000, implementing DI for disaster recovery.

Establishing greater sales cycle predictability remains a key priority for management to enable Cirata to enhance growth potential. The cadence of contract activity is improving as evidenced by the uplift in the number of smaller new and growth contracts. Moreover, the sales team is more established which provides greater confidence in sales cycle management and deal closure predictability.

Outlook

With the current pipeline, prospects in progress (including those delayed from Q2 2024) and three months of the year remaining, the Board is retaining its FY24 bookings guidance of $13-15m as, with strong and improved execution, it remains achievable although demanding. We believe we will continue to see improving levels of sales activity, both direct and through partners, as we trade through Q4 2024, and our Go-To-Market (GTM) strategy continues to mature.

The Board continues to believe that the current levels of lead generation and early-stage pipeline support the medium-term ambitions of the Company.

Business Review

As we stated in our turnaround plan, meaningful commercial partner engagement is a prerequisite for the Company to build sustainable growth. The new management team has worked hard over the last several quarters to rebuild trust with our partners.

We have made strides in this regard, and post-period end were pleased to announce the amendment of the Original Equipment Manufacturer ("OEM") sales agreement with IBM. The revised agreement signifies the commitment by both organizations to this partnership and as part of this commitment the remaining $1.7m of the prepay has been retired early. This means future bookings will no longer be drawn down against this prepaid balance, ensuring a fresh commercial alignment between both parties that will help pipeline development, GTM activities and conversion. The agreement auto-renews on a 12-monthly basis subject to both parties' agreement.

This announcement represents a strategic extension to the existing OEM agreement to integrate Cirata's Live Data Migration ('LDM') technology inside IBM's Big Replicate solution.

Cirata also announced on 1 October 2024 that Amanda Jobbins and Eric Collins have been appointed to the Board as Non‐Executive Directors with immediate effect. Amanda currently Chief Marketing Officer at Vodafone Business and Eric, Co-Founder of Venture of Impact X Venture partners will bring a wealth of experience to the Board.

Product

The cadence of engineering output continues to improve with important releases in our DevOps product suite, Subversion Multisite Plus, which signals Cirata's commitment to supporting the Subversion community, an important niche for the Company.  

LDM 2.6 was made generally available in August marginally ahead of plan, adding product capabilities in four key areas: improved security features, role-based access control for more of the product APIs, improved usability and functionality with Databricks, and initial support for Apache Iceberg^[1] with IBM watsonx.data targets. The improvements in this release are in direct response to customer requirements and alignment to partner technology roadmaps.

The new GTM organization is bedding down and leads from partners and customer activity levels are increasing and contributing to pipeline growth. The pipeline is higher quality, better qualified and more robust compared to this point last year or indeed 6 months ago.

Stephen Kelly, Chief Executive Officer, commented:

"I am pleased with the development of the partner engagement in Q3, and in particular with the announcement of the IBM OEM amendment and the removal of the prepay overhang. Our sales teams are engaging constructively with our partners as we see an improving ramp in joint leads. People familiar with enterprise software will know a small transaction can take as much work as a seven-figure contract. Cirata's strategy include 'land & expand' which we are seeing early signs of bearing fruit with multiple purchase orders from the same customers as their projects deliver successfully. The number of DI contracts completed in the period signals an improving level of sales activity and, although too early to call a trend, it is encouraging.

As I stated in the Q2 update, we are making good progress, but this is not represented in the headline numbers. Q3 was very much as expected and the deals we are tracking in our pipeline remain in play and are aligned to customer timelines and consistent with our FY24 bookings guidance.

I would like to extend a warm welcome to our two Non-Executive Directors Amanda Jobbins and Eric Collins. Amanda and Eric bring a huge amount of growth experience and energy to the Board. I know they are excited to help us in our goal to deliver a sustainable high-growth Company."

This announcement contains inside information under the UK Market Abuse Regulation. The person responsible for arranging the release of this announcement on behalf of Cirata plc is Larry Webster, Company Secretary.

For further information, please contact: 

Cirata	[phone]
Stephen Kelly, Chief Executive Officer
Ricardo Moura, Interim Chief Financial Officer
Daniel Hayes, Investor Relations
FTI Consulting	[phone]
Matt Dixon / Kwaku Aning / Usama Ali
Stifel (Nomad and Joint Broker)	[phone]
Fred Walsh / Ben Good / Sarah Wong
Panmure Liberum (Joint Broker)	[phone]
Max Jones / John More

About Cirata

Cirata, accelerates data-driven revenue growth by automating data transfer and integration to modern cloud analytics and AI platforms without downtime or disruption. With Cirata, data leaders can leverage the power of AI and analytics across their entire enterprise data estate to freely choose analytics technologies, avoid vendor, platform, or cloud lock-in while making AI and analytics faster, cheaper, and more flexible. Cirata's portfolio of products and technology solutions make strategic adoption of modern data analytics efficient and automated.

For more information about Cirata, visit www.cirata.com

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[1] Iceberg is the data representation used in the IBM watsonx.data platform, and a supported table format for other commercial platforms including Databricks and Snowflake.

 

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