16TH December 2024
Cirata plc
('Cirata' or the
'Company')
Contract Win and FY24
Guidance
Cirata secures c.$2m Live
Data Migrator contract ("LDM contract") with IBM to support top 3
US bank, representing the largest IBM OEM Big Replicate
Implementation to-date
Preference for one-year
contract commitments vs. multi-year among certain major customers
drives withdrawal of FY24 Bookings guidance
Summary
·
Top 3 US bank signs a circa $2m LDM contract for a
one-year term
·
Represents Cirata's largest LDM contract signed
to-date in financial services
·
Largest Cirata implementation[1] to-date through the IBM Big Replicate
platform
·
Certain major customers' purchasing preference for
one-year terms & projected sales movement from Q4 to H1FY25
leads to withdrawal of FY24 bookings guidance
·
Q4FY24 trading update expected to be provided in
mid-January 2025
Cirata plc (LSE: CRTA) provides the
following update on commercial momentum and FY24 Bookings
guidance:
Top
3 US bank signs circa $2m LDM contract
The LDM contract announced today is
for the sum of approximately $2m for a one-year term and it will
commence on December 31, 2024.
Cirata views the LDM contract as the
next step in its ability to provide long-term support to this top 3
US Bank as the customer builds out its Data Architecture and
implements Cirata's LDM product into one of the most demanding
enterprise environments. Key features of the LDM offering include
live data movement at scale and without data loss, interoperability
across multiple data platforms, and the avoidance of vendor
lock-in. Cirata's future road map is closely aligned with this top
3 US bank as it represents the leading edge of data transformation
within the enterprise.
The LDM contract also represents the
first transaction completed under the terms of the new OEM
agreement to integrate Cirata's LDM technology inside IBM's Big
Replicate solution, previously announced on 2 October 2024. This
will be the largest value contract for LDM since the restructuring
of the Company in March FY23, the largest LDM contract to date in financial services and the largest
implementation through the IBM Big Replicate platform.
Cirata's LDM technology allows Big
Replicate customers to use a multi-cloud solution, leveraging the
benefits of Watsonx.data (Artificial Intelligence
("AI")).
FY24 Bookings Guidance
In parallel with the announcement of
the LDM contract, Cirata withdraws its FY24 bookings guidance. This
is partly due to certain major customers opting for one-year terms
rather than multi-year terms and some movement of pipeline
opportunities and bookings expectations from Q4FY24 to H1FY25,
which has caused a sufficiently wide variation to expected outcomes
for bookings in FY24.
Cash overheads run rate is currently
c.$5m for Q4, slightly better than expectations. Cash burn for Q4
will be dependent on the closing bookings and cash collection for
the quarter once complete. It is anticipated that Q4FY24 cash burn
will show sequential improvement relative to Q3FY24 (Q3FY24: c.
$3.2m).
Management will update the market on
the outcome for Q4FY24 in its regular quarterly trading update,
expected in mid-January 2025. Also, supporting communication about
this announcement and the progress of the business
to date will be made available in the investor relation section of
Cirata's website (https://cirata.com/investors/reports-and-presentations)
in due course.
Stephen Kelly, CEO of Cirata commented:
"Cirata has set itself the challenge of delivering its LDM
product to meet the needs of the most demanding enterprise
technology environments. The announcement of the LDM contract
through IBM Big Replicate proves Cirata is well positioned to meet
those needs. We look forward to shaping a long-term relationship
with this top 3 US bank as they build out their data architecture
in response to the rapidly changing AI and Machine Learning
landscape.
The recent renewal of our OEM agreement with IBM set the stage
for the closure of this LDM contract, and so the win itself is
doubly important. It is not only the largest transaction in the
Company's history for LDM within financial services, it is also the
largest implementation of LDM for Big Replicate through our highly
valued partner IBM.
While today's announcement is a clear signal of our
technology's capabilities and our own ability to build commercial
trust, it is also a reminder that large contracts can make our
business lumpy and that forecasting has indeed proved challenging.
In parallel with the announcement of this new contract, Cirata
withdraws its FY24 bookings guidance. This is mainly due to the LDM
contract and one other contract being of a one-year rather than a
multi-year term and the movement of pipeline opportunities and
bookings expectations from Q4 FY24 to H1 FY25, which has caused a
sufficiently wide variation to expected outcomes for bookings. Our
focus continues to be on the long-term potential of our support for
this top US bank, our partner IBM and our other
customers.
I
thank our colleagues for getting us towards the end of the recovery
phase of the Company. We inherited a broken business from a
peak annualized cost base of $45m per annum to a company exiting
FY24 with a cash overhead of circa $20m per annum. Our cash
burn in Q1FY23 was an unsustainable $11m per quarter and as we exit
Q4, Cirata will be on a path towards cash flow breakeven. That
adjustment has involved more than halving the workforce, with all
the trauma that entails. However, our colleagues are responding to
that challenge by building and hardening a differentiated product
and selling successfully into one of the most demanding
environments in IT. The Data Integration product performance has
improved from -87% decline in Q1FY23 to 180% growth in the last
reported quarter, Q3FY24.
Tomorrow, we roll up our sleeves and go again as we seek to
close out further opportunities in Q4 and move into the Growth
phase from FY25".
Key
performance indicators to date:
|
KPI
|
FY22 Q4
|
FY23 Q1
|
Q2
|
Q3
|
Q4
|
FY24 Q1
|
Q2
|
Q3
|
|
Headcount
|
177
|
193
|
127
|
109
|
112
|
116
|
107
|
92
|
|
Overhead
|
$11.1m
|
$9.4m
|
$8.2m
|
$7.0m
|
$5.7m
|
$6.2m
|
$5.5m
|
$5.3m
|
|
Bookings
|
$2.2m
|
$2.1m
|
$0.7m
|
$1.7m
|
$2.7m
|
$0.7m
|
$1.7m
|
$1.7m
|
|
DI
Bookings
|
$1.2m
|
$0.2m
|
$0.4m
|
$0.5m
|
$1.5m
|
$0.3m
|
$0.6m
|
$1.4m
|
|
DI
Growth
|
-43%
|
-87%
|
-69%
|
0%
|
25%
|
50%
|
50%
|
180%
|
|
Contract
Activity
|
2
|
2
|
1
|
2
|
2
|
3
|
1
|
8
|
|
Cash
Burn
|
$10.3
|
$11m
|
$6.3m
|
$7.9m
|
$5.5m
|
$4.9m
|
$4.2m
|
$3.2m
|
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, 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