REG - Cirata PLC - Q3 Trading Update and Outlook

CirataAnnouncement

09/10/2024 07:00

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RNS Number : 4415H  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
(https://stream.brrmedia.co.uk/broadcast/66ff9cca2f29403633bfd4e6) .

 

 

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                                          +1 (925) 380 1728
 Stephen Kelly, Chief Executive Officer
 Ricardo Moura, Interim Chief Financial Officer
 Daniel Hayes, Investor Relations

 FTI Consulting                                  +44 (0)20 3727 1137
 Matt Dixon / Kwaku Aning / Usama Ali

 Stifel (Nomad and Joint Broker)                 +44 (0)20 7710 7600
 Fred Walsh / Ben Good / Sarah Wong

 Panmure Liberum (Joint Broker)                  +44 (0)20 3100 2000
 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
(http://www.cirata.com)

 

 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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