If Netflix’s Narcos and Money Heist got you hyped up about catching crime in action, you would enjoy what defence and intelligence tech company Kleos Space S.A. (ASX: KSS) does. Basically, it locates radio transmissions from space—that would otherwise go under the radar—to identify illegal and hidden activity on land and sea. Then, it lets companies purchase captured data.
Exciting, right? Practical, too. This is why many companies and organisations have signed up for its services.
Most recently, the Company announced that its Luxembourg spacecraft operational authorisation has been extended. Given that, it can operate up to eighty spacecraft enabling its mission.
Kleos’s intelligence products have been delivered to Government and commercial customers against a daily operational service level for a consistent two-month period. It also offers Geospatial Intelligence (Guardian LOCATE) products that are generated by processing data collected by Kleos satellites over predefined Standard Collection Zones (SCZs) that contain numerous customer areas of interest. Current SCZs are Europe and Asia Pacific.
It earns money by selling subscriptions that give institutions a license to access all available intelligence products on an SCZ basis, including to an additional government intelligence agency to which products are being delivered in Q1 and Q2. Kleos provides Data-as-a-Service (DaaS)—or Mission-as-a-Service (MaaS)—company. In February, it gained revenue of $1.4 million, and its evaluation data is now being accessed by 12 government agencies and 31 commercial entities.
Besides the contract extension, it reached another milestone recently, wherein it was able to collect important information every day from a very important area for its early customers. It uses satellites to collect radio frequency (RF) data from this area and then process it to create intelligence products. These satellites are in a specific orbit that allows Kleos to collect data every day.
The Company’s intelligence products are helpful for governments and businesses to monitor and detect illegal or hidden activities such as piracy, drug trafficking, smuggling, pollution, and border issues. The information they provide is an additional source of intelligence to improve surveillance and detection capabilities.
In H1 FY23, its revenue increased by 117% to $291k while its losses shot up 15% to $7.8 million. Its cash equivalents also fell to $1.7 million, down from over $6 million in H1 FY22. With greater technical capabilities now, the Company is better poised for financial growth.
Plus, it is focusing its efforts on growing in the US. In December 2022, President Joe Biden committed over $1 trillion to the American defence department. Noticing these advancements and scope for growth, Kleos has made some management changes to reflect its US focus, integral to its long-term growth. After all, it enables the Company access to some high-value government contracts potentially.
Recent management changes are targeted towards increasing Kleos’ senior executive leadership presence in the US. These changes follow Kleos securing its first US Government Agency contract in September 2022.
Alan Khalili, a US-based senior executive, was made CEO from his previous CFO position. Similarly, Sara Fanous was made Vice President of Finance and acting Chief Financial Officer to support the Company’s activities in the US.
Contracts like these infuse optimism in Kleos’s shareholders while also hinting at future profitability.
Alinda is a Business Reporter for The Sentiment
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