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NetLinkz (ASX:NET) - CEO & Executive Chairman, James Tsiolis
CEO & Executive Chairman, James Tsiolis
Source: Finance News Network
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  • Cloud solutions provider Netlinkz (NET) has had a strong quarter of revenue growth and expansion across its business
  • Netlinkz has reported over 250 per cent revenue growth over the quarter, largely off the back of increased activity in China
  • Projected revenue for the 2020 financial year remains unchanged at $15.3 million – showing the company has staved off the worst effects of COVID-19
  • The acquisition of SSI appears to have been both forward-thinking and fortuitous, with pilot programs to be commercialised in the next six months
  • Given the company’s growing opportunities in China, and a new partnership in Japan kicking off in June, the company’s expansion seems well on track
  • Netlinkz closed green with a handy 4.76 per cent boost – shares are priced at 4.4 cents each

Cloud solutions provider Netlinkz (NET) has had a strong quarter of revenue growth and expansion across its business.

Finances

Netlinkz has reported over 250 per cent revenue growth over the quarter, jumping to $1.575 million from $615,000. This comes largely off the back of increased activity in China and a new revenue coming in from the recent acquisition of Melbourne-based systems integrator SSI Pacific.

Projected revenue for the 2020 financial year remains unchanged at $15.3 million.

Netlinkz ended the March quarter with a cash balance of $7.3 million – enough to keep the business going long into the future, even if revenues fall or unforeseen costs arise.

A great leap forward

The company is continuing to focus on its burgeoning China operations. New customers have been added through the quarter – potentially due to the need for secure online systems while the workforce is relocated to less secure home working environments.

While sales were down slightly compared to the previous quarter, NET still added more than 18 per cent to its client base for its Virtual Invisible Network (VIN) technology for a total of 437,000 licences.

This increase – which occurred even amid the heavy COVID-19 lockdown – bodes well for NET’s transfer of $4.1 million in funding to Netlinkz China to facilitate the next 18 months of working and investment capital.

The company has also landed its first long term major infrastructure project. A World Bank sponsored Water Treatment Project in Sichuan Province selected Netlinkz’ VSN product to be the backbone of its IT infrastructure. Aside from the initial contract revenue of $460,000, it also provides a 25-year revenue stream across the life of the project.

Another new development for the company’s China activities is the application of the Virtual Secure Network (VSN) product to be integrated into autonomous vehicles. This new vertical is expected to be embedded in China’s autonomous vehicle sector by 2021.

The home front

The acquisition of SSI appears to have been both forward-thinking and fortuitous.

SSI’s VIN product is rolling out in a number of pilot programs across Australia and with each new business using the model, the applications for Netlinkz VSN and VIN solutions seem to broaden even further.

From the resource sector to remote asset operation in the energy sector, and even defence applications, the company has a foothold into some of the biggest-money industries globally.

Netlinkz is expecting the pilot programs to be commercialised in the June and September quarters.

Outlook

The future seems bright for Netlinkz.

As its software solutions continue to be further developed and refined, the company’s product is becoming more user-friendly, efficient and easy to integrate across multiple industries and applications.

Given Netlinkz’ burgeoning opportunities in China, and a new partnership in Japan kicking off in June, the company’s expansion seems well on track for continued revenue growth.

The flexibility that is building into Netlinkz’ suite of solutions means the company can partially wind down research and development of its products and concentrate instead on marketing and expansion.

Cost-saving measures instigated with the COVID-19 outbreak will also bring savings in the near term. Company salaries and director fees have been cut by 50 per cent since the start of April, so monthly expenditures will come down.

It looks like Netlinkz can just keep rolling and enjoy the view from the cloud.

Netlinkz closed green with a handy 4.76 per cent boost – shares are priced at 4.4 cents each.

NET by the numbers
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