Cybersecurity firm Tesserent Ltd (ASX: TNT) released its audited FY21 half-year report on Friday, sending the share price as much as 13% higher on the day.
Tesserent shares have trended downwards since the start of the year, but have still returned more than 400% over the last 12 months.
TNT share price chart
What does Tesserent do?
Tesserent offers a broad range of cybersecurity services and products to its clients, assisting them in achieving full end-to-end protection of their digital assets.
The company listed on the ASX in 2016 but really started gaining some momentum in 2019 when it introduced its Cyber 360 strategy. The aggressive growth-by-acquisition strategy has involved buying up other businesses in areas such as consulting and security advisory, cloud migration, risk and compliance, governance and many more.
Tesserent’s HY21 results
Statutory revenue for the half-year was $28.8 million, up from $5.3 million (444% increase) on the prior corresponding period (pcp), partially driven by five acquisitions made during this time.
The company reported operational EBITDA of $2.9 million, up from a loss of $1.7 million in the pcp.
Tesserent’s cash balance as of December 2020 was just shy of $8 million against borrowings of $9.9 million.
Cash flows from operating activities showed a net cash outflow of $2.9 million, with the last six months being funded by proceeds from a capital raise and an additional debt facility.
Tesserent’s net loss widened from $3.7 million in the pcp to $5.9 million.
Future outlook
Tesserent will continue to execute its Cyber 360 strategy and expand into three key markets of government, critical infrastructure and banking & finance and build out high-value recurring revenues.
Acquisitions will be further integrated to achieve cost synergies, with organic growth being driven by cross-selling opportunities.
International expansion is said to be on the cards with potential opportunities in the USA, UK, New Zealand and Canada.
Are Tesserent shares a buy?
Tesserent is worth keeping your eyes on in 2021 in my view. I think there are definitely some broader macro themes playing to its advantage, with more cyber-attacks occurring, which has placed a greater importance on the protection of digital assets.
I’m happy to wait on the sidelines for the time being though noting the acquisition rampage Tesserent has been on recently. It will be interesting to see how well it can integrate its current offering to achieve cost savings and reach a point of profitability in the years to come.
If you’re looking for share ideas, click here to read: 3 more “buy the dip” ASX shares to buy in a market crash: XRO, OCL & CSL.
