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FirstWave Cloud Technology shrinks FY21 losses amid COVID

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FirstWave Cloud Technology has improved its bottom line amid the brunt of the COVID-19 pandemic, shrinking its losses after tax over the course the 2021 financial year by 22.8 per cent. 

This saw the publicly listed cloud security company reduce its net loss after tax to $10.6 million for the 12 months ending 30 June, continuing the trend seen in its half yearly results.  

According to FirstWave, this includes the full impact of the recognition of non-cash share-based payment expenses just a touch over $3 million, resulting from share rights and options being granted to employees and officers, which is down by $900,000 from the same period a financial year prior. 

Revenue was down by 3.4 per cent, to just below $8 million, which was due to non-recurring revenues being $425,936 lower than the previous corresponding period. 

International revenues however were pegged at $7.6 million, a 2 per cent rise. While higher than FY20, this was still below its expectations and was attributed to the impact of COVID-19 interrupting “promising” partnerships with the England-based businesses Digital Wholesale Solutions and NTT Data UK. 

Also affecting its financials was the withdrawal of Telstra’s supplier financing platform, which resulted in FirstWave invoicing Telstra monthly in arrears on 45-day payment terms from March 2021.  

At the start of the withdrawal, cash on hand reduced without further billing as the prepaid revenue was transferred from deferred revenue to earned revenue. From then until February 2022, upfront payment and deferred revenue is expected to keep reducing each month, with monthly invoicing to represent a growing portion of monthly revenues. 

As a result, the company’s debtor balance will increase to reflect monthly invoicing and 45-day payment terms. 

Due to the pandemic, FirstWave said it would not be possible to say how the changing nature of the pandemic will affect its operations in the future, however it is now prepared to deal with quick changes to its business to operate during potential future lockdowns. 

What the company was able to share however was its priorities for FY22, which includes plans to upgrade its platform and to lower operating costs by an estimated $2 million per annum. 

FirstWave’s plans for the new financial year have proved to be a contentious topic for the business, as its former CEO, Neil Pollock, left the company last month because he could not garner enough support for his FY22 plan

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