Following the Medibank and Optus breaches, the latest Aussie victim of a cyberattack is Latitude Financial, a consumer lender with clients like JB HiFi. In March, the Company witnessed an attack that compromised the data—driver’s license numbers, passport numbers, financial statements and personal details—of 14 million customers. Plus, like Medibank, it has refused to pay the ransom.
Cyberattacks have become all but commonplace among Australian companies, making people wonder: what happened to the cybersecurity departments?
That’s probably why software, like Prophecy’s Snare, is enjoying its time in the spotlight.
Software developer Prophecy (ASX: PRO) has been making significant strides in the cybersecurity market with its flagship product Snare. The cybersecurity software product line has been gaining traction as the primary license model selected and sold to commercial customers, while government customers in the USA and UK continue to prefer perpetual license models. Overall, 55% of all new opportunities are subscription-based, but when government and military customers are excluded, this percentage jumps to 85% of all new opportunities.
Prophecy’s strategic focus on key markets, such as the USA, UK, and Europe, has been driving growth in both sales and pipeline for Snare. The software provides critical government-recommended or mandated security controls, including cyber threat detection, security information and event management (SIEM), and centralized log management. In Q3 FY23, Prophecy signed new Snare contracts across medium and large enterprises and government segments, generating sales of $1.3 million.
The Company’s latest financial report reveals a debt-free balance sheet with a cash balance of $12.8 million as of the end of Q3 FY23, up from $9.7 million at the end of Q2. Its annualised recurring revenue (ARR) has reached $21.3 million as of March 31, 2023, reflecting a 16% increase from the end of FY22.
Prophecy’s strategic focus on marketing through the Genesys and Amazon Connect contact center technology ecosystems has resulted in contracted sales growth for eMite, the Company’s SaaS-based customer experience and contact center analytics platform. Notably, Prophecy has secured new clients across diverse sectors, including Bank of Queensland and Services Australia in Australia, AXA Versicherungen AG in Germany, Clario in the USA, and the Ministry of Education in Singapore.
That said, in H1 FY23, Prophecy reported a loss of $2.12 million, up from $680k in the prior period, and a cash flow of $2.76 million, down by approximately $3.63 million. The Company’s cash balance decreased by 8% to $9.79 million. Even so, Prophecy’s positive market presence was recognized by the Australian Government Department of Defence Export Office, which invited Prophecy to join Team Defence Australia. It marked the Company as a key supporter of the Australian Government’s sovereign industrial capabilities.
Looking ahead, Prophecy has identified a potential sales pipeline for Snare valued at $10.9 million for the remainder of CY23, and Snare remains an active member of various consortia bidding for US Federal and Defense contracts. The Company maintains a positive outlook for continued growth in Snare’s business as the market for flexible cybersecurity and compliance solutions continues to expand.
Seeing the rise of cyberattacks everywhere—together with the growth of chatbots like ChatGPT that can help people hack, applications like Snare are set to score huge profits in the coming years.
Alinda is a Business Reporter for The Sentiment
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