Archtis (ASX:AR9) share price slips on $3.3 million loss

Shares in the cyber security company are heading backwards today on its FY21 results.

| More on:
Digital screen depicting padlock overlaid on circuit board

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Archtis Ltd (ASX: AR9) share price is sliding after the company released its results for financial year 2021 (FY21) this morning.

Right now, the Archtis share price is 33.5 cents, 2.9% lower than its previous close.

Archtis share price slumps despite 743% revenue increase

Here's how the cyber security provider performed through FY21:

The company's annual recurring revenue over FY21 was $1.9 million, 681% more than in FY20.

It also received cash receipts worth $7.4 million, 846% more than it did in the previous period.

Archtis ended the period with $12.7 million in cash.

What happened in FY21 for Archtis?

Here's what drove the Archtis share price in FY21:

Archtis announced its plans to acquire and merge with Nucleus Cyber in October. The merger took place in December.

The merger expanded Archtis' footprint in North America, Europe, the Middle East and Africa.

It also produced cross-selling opportunities with Nucleus Cyber's existing product offering within the Microsoft Corporation's (NASDAQ: MSFT) software suite.

Archtis also secured its largest deal ever in FY21. That was was with the Australian Department of Defence and is worth $4.2 million.

Then, in the fourth quarter, the Department of Defence bought two multi-year contracts worth a total of approximately $1.4 million for the licensing of NC Protect. The defence department will use Archtis' software to secure information collaboration across the Microsoft suite.

What did management say?

Archtis' chair Dr Miles Jakeman commented on the results driving the company's share price today, saying:

Financial Year 2021 (FY21) will go down as a bittersweet period for the company as we entered into new global market opportunities. Amongst the personal loss and economic challenges experienced by hundreds of millions of people across the globe, Archtis is pleased to deliver a transformational and record-breaking financial year.

Archtis' financial performances this year was substantially higher in every single reporting metric…

Remote work has brought new challenges to collaboration and has exposed a broader need around security; particularly associated with breaches and loss of sensitive information originating from employees and contractors (insider threats). Nation-states, corporate espionage and human error have exponentially added to the challenges global organisations are facing in securing their data. The old security model is broken and archTIS is leading the way toward new and innovative methodologies that make collaboration more secure, easier to use, simple to deploy and scalable.

What's next for Archtis?

Investors focused on the Archtis share price in FY22 should keep an eye out for these developments:

The company is planning to continue driving towards triple-digit growth in annual reoccurring revenue in FY22.

It's also going to focus on creating superior products and capture a larger global market share. It will be looking out for acquisition opportunities to expand its product offerings.

Archtis will continue working on pipeline opportunities with Microsoft, Thales, Raytheon, and other partners.

Finally, the company has pointed to MarketsandMarkets research that shows the global data-centric security market's size will increase from US$3,460 million in 2020 to US$9,763 million by 2026.

It's safe to assume Archtis is hoping to get a slice of that exceptional growth.

Archtis share price snapshot

Despite today's fall, the Archtis share price has gained 8% year to date. However, it has dropped 31% since this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Microsoft. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Earnings Results

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »

Agricultural ASX share price on watch represented by farmer in field looking at tablet computer.
Earnings Results

Graincorp share price lifts off as dividend is maintained and debts plunge

ASX 200 investors are bidding up the Graincorp share price today. But why?

Read more »

Smiling elderly couple looking at their superannuation account, symbolising retirement.
Earnings Results

Why is this ASX 200 stock avoiding the market selloff and pushing higher?

Not all shares are falling with the market on Thursday.

Read more »