Advanced data network company Netlinkz (ASX:NET) confirmed its strong recent operating momentum, with a quarterly update that showed revenue growth accelerated in the March quarter.

The company booked revenues for the quarter of $2.9m, an increase of 85 per cent from the prior year period.

Cash receipts for the quarter of $2.1m contributed to an impressive YTD increase on the prior comparative period, while Netlinkz also stayed busy on the hiring front as it continued to scale up the size of its sales and delivery team to meet increased demand.

Netlinkz also posted an 89 per cent increase in revenues out of China compared to the prior year period, even while navigating seasonal declines due to the timing of Chinese Lunar New Year.

The seasonality of that revenue is now pointing to “a stronger Q4”, Netlinkz said.

While the Chinese market is expected to provide consistent growth in recurring revenues, the company also took key steps to advance in new markets during the quarter as it executes on a global client strategy.

 

Global footprint

The March quarter saw the establishment of a binding agreement with Greece-based Uni Systems Information Technology, which will act as a key hub for Netlinkz to launch its software into the European market.

Uni Systems – a wholly owned subsidiary of the multinational Quest Group – will collaborate with Netlinkz in the IoT research lab established in Athens, Greece to accelerate proof-of-concept and go to market strategies for Netlinkz’s proprietary VSN software.

The company also signed a distribution agreement with Frame UK in the quarter, in which NET’s technology will be offered as part of Frame’s broadband packages for medium and large corporate clients.

Those deals add to agreements with LNS International (Malaysia) and Natsoft (India), demonstrating that Netlinkz is successfully executing on its global distribution strategy.

“The business will see a growing proportion of recurring revenue (a business focus), primarily from VSN licensing and support as it moves forward and will continue to focus on margin improvement,” Netlinkz said.

The VSN now runs on all major cloud networks including AWS and Microsoft Azure, with the capacity to reach “100Gbps in core networks — 250x more throughput than some competitor solutions”, the company said.

With its proprietary technology in place and a distribution network that spans multiple international markets, Netlinkz is now positioned to build a diversified base of global recurring revenues.

 

This article was developed in collaboration with Netlinkz, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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