Cybersecurity player FirstWave gets a boost as annual revenues approach $2m

Cybersecurity firm FirstWave Cloud Technology (ASX:FTC) was among the tech leaders this morning after a positive Q1 trading update.

The Sydney-based company said recurring revenue across its domestic and global operations came in at $694,000, up from $659,000 in January.

All of that growth was driven by its international division, which reported RR of $158,000 last month — 36 per cent higher than February and 690 per cent higher than February 2020.

Domestic revenue dipped slightly to $536,000, from $543,000 in January.

Shares in the company rose above 12c in morning trade, still off December highs of ~18c but above its May 2020 lows of less than 6c.

Looking globally, FTC said growth in its Europe and UK divisions had been patchy, which it attributed to lingering uncertainty across sections of its client base caused by the pandemic.

But it flagged strong growth in Africa, where the rollout of its WebProtect DNS platform though distribution partner Moja Access had “contributed strongly” to the outperformance of its international division in February.

Moja Access is a subsidiary of the CSquared Group, which was started within Google in 2011 to build fiber optic networks across sub-Saharan Africa.

FTC flagged a separate partnership agreement with Dimension Data Systems (DD), an IT company based in Johannesburg, South Africa.

The three-year deal will act as a promising new distribution channel, where customers will have the option deploy FTC’s cybersecurity software on an opt-out basis through DD subsidiary Internet Solutions, a “well known internet service provider in Africa”, the company said.

On the domestic front, FTC advised that its Product and Services Agreement (PSA) with Telstra had been extended for another 12 months.

Billing arrangements have been changed so that FTC will receive payments sequentially (rather than a year in advance).

That will have a short-term impact on cash-flows but is expected to “wash through” by the end of 2021, the company said.

FirstWave is one of a number of ASX small caps looking to capitalise on the broader tailwinds in cybersecurity, after the sector as a whole rose by 90 per cent in 2020.