After a brief ASX suspension for not reporting its financials on time and incurring a loss of nearly $12 million in FY23, software company Netlinkz (ASX: NET) is looking to alter its course in FY24. 

In Q1 FY24, the Company, which develops intelligent networking solutions, reported revenue of $6 million, marking a 34% uptick on Q1 FY23. Its satellite division, Starlink, brought in $1.9 million in revenue, an increase on last quarter’s $1 million. These upticks come as the Company’s cash burn amounts to $743k on operating costs this quarter.

To beef up its cash reserves, on October 6, 2023, Netlinkz raised up to $10 million with US investor Obsidian Global. The Company received $2.25 million under the first tranche of this agreement in October itself. On September 22, 2023, it announced a Second Senior Note Facility to raise up to $12 million. This facility is currently open, and the Company is finalising documentation with a number of lenders.

Netlinkz Managing Director and CEO, James Tsiolissaid, commented, “We have continued to deliver quarter-on-quarter revenue growth whilst also developing the base for significant new opportunities for NaaS and Starlink, particularly across the Asia Pacific region. It is encouraging to have the support of a new funding partner, Obsidian, to help us deliver on our significant and varied growth opportunities.”

Netlinkz’s NaaS (Network-as-a-Service) Starlink bundle offers potential customers a secure, private network for all their internet-connected devices. It has already expanded its sales channels through partnerships, having inked substantial agreements with companies like Data#3 Limited and Cello Group Limited in Australia, Spark and Kordia in New Zealand, PT&T in the Philippines, and Telespazio in Latin America.

There are ongoing discussions for additional partnerships in various markets, and Netlinkz expects new opportunities to come up as Starlink extends its satellite internet services to more countries.

For a smooth customer experience, the Company is investing in customer support. That said, in the September quarter, Netlinkz didn’t invest more into the Starlink inventory, seeing as it had no future purchase commitments with Starlink.

Besides that, Netlinkz has teamed up with telecom company HGC Global Communications to create a comprehensive global communication platform, Network as a Service (NaaS) for enterprises, built on the foundation of VSN (virtual security network) technology. The initial phase involves the introduction of NaaS services for enterprises located in Thailand. Later, this successful launch will pave the way for a broader rollout throughout the Southeast Asia region.

The Company will officially launch the partnership with HGC on November 15, 2023. 

Netlinkz didn’t do so well on the China front, with its China Network Engineering Solutions business (AOFA and iLinkAll) witnessing a revenue decline of 12% on PCP, reaching $3.2 million. Netlinkz has an 80% stake in iLinkAll, and its Hong Kong division has been focusing on higher-margin sales opportunities to minimise its cost base.

Its SSI Telecom surveillance business (for legal interception and compliance) performed consistently, with revenue of $800k in the September quarter remaining largely flat on the prior year.

During the quarter, Netlinkz spent $327k on research and development, up from $290k in the PCP, as the Company continues to develop its Network-as-a-Service suite of products and services, particularly to support its roll-out with HGC.

Netlinkz ended the quarter with $590k in cash, with its eyes sternly set on capital raising.