Cirata, the renamed and recovering WANdisco, issued a preliminary trading update for the quarter ended December 31 showing bookings growth as it gets its business back on track.
The company has two lines of business, supplying replication-based active data integration (DI) and application lifecycle management (ALM) software to enterprise customers. It has increased its cash balance to $18.2 million from the guided $16 million. Sales bookings in the fourth quarter (Q4) were $2.7 million, up from $2.2 million a year ago and $1.7 million in Q3, meaning 23 percent growth year-on-year. Third quarter bookings of $1.7 million were sequentially higher than Q2 but lower than the $1.9 million reported for Q2 2022. This is despite some slippage of sales completion from Q2 to Q3 and again from Q3 to Q4.
CEO Stephen Kelly said: “FY2023 has been an eventful year for all Cirata stakeholders, a near collapse of the business followed by a herculean effort to rebuild from the ground up. The March 9 announcement represented an existential crisis. Against all odds, the turnaround is well underway. Our Q3 and our Q4 reflect the first steps of a company coming back ‘off the canvas’. Sequential growth in bookings through Q2, Q3, Q4 and transacting with companies such as GM, NatWest and Experian amplify the progress this company has made since the dark days after March 9.”
WANdisco revealed its gross sales mis-reporting and AIM stock market suspension on March 9 last year. This was attributed to a single and so far unidentified senior sales executive who nearly brought the company down.
Kelly has reorganized sales, with three CROs reporting to him. Rich Baker has been appointed as CRO International from being SVP Global Sales, Chris Cochran, who was VP for Global Alliances, is now CRO North America, and Justin Holtzinger, previously SVP Customer Success and Engineering, is now CRO for the ALM business. Kelly refers to his reorganization as removing a layer of management. Previously there was one single CRO and SVP for Global Sales, Frank Moser, reporting to the CEO.
In videotaped remarks, Kelly said Cirata had not focused on its ALM products in the past and that side of the business had flatlined. He wants to see growth from it in 2024.
Kelly said: “We completed the FY23 Turnaround Plan and now shift gears into the FY24 Growth Plan. We are getting into our stride, but this is minimum table stakes – we need to drive a much higher quality execution in our Go-to-Market model. The new structure of our sales organization with the leadership of Rich, Chris, and Justin reflects a flatter, sharper, more customer focused Cirata.” There will be improved visibility around pipeline build, predictability, and closure rates, claims Kelly, who’s hoping for significantly improved pipeline conversion.
He added: “With go to market resources, what we’ve struggled to do in the past … is working with customers on sales cycles. But what we’ve failed to do well is actually close them predictably. And there’s been slippage.” The sales reorg flattens the structure “so there’s only one level of management between myself, the chief executive, and the individual salesperson or the sales consultant.”
“The turnaround plan we shared with the investors during the summer is substantially completed … We’ve got ourselves ready, and match fit for FY24,” Kelly added. “We want to drive high quality growth with marquee Fortune 500 companies, and that’s my personal aspiration.”
From now, it’s all about sales growth, with a cash flow break-even target for the end of this year. CFO Ijoma Maluza said Cirata should be “generating positive cash as we move into 2025.”
Cirata is aiming for global market leadership in its product sector by 2028.
The company said we should expect the preliminary FY2023 results update between mid-March and mid-April 2024. It will provide full year 2024 guidance for both bookings and year-end cash balance in the earlier of the Q1 Trading Update or the FY23 preliminary results. An in-depth review and commentary of the Turnaround Plan will be provided in the FY23 results.
