Spirit sees ‘disappointing’ FY24 amid record Q4

Spirit Technology Solutions has experienced a “disappointing result” for its 2024 financial year despite producing a record fourth quarter and shrinking its statutory loss.

For the twelve months to 30 June 2024, Spirit said in a statement to the Australian Securities Exchange (ASX) that its unaudited results are down from a loss of $11.4 million in the financial year prior to a range of $9.6 million to $11 million loss in its preliminary results for FY24.

While its full results are slated for release on 23 August, this indicates a reduction in its overall loss from 3.5 per cent to 15.8 per cent.

In the company’s results for FY23, Spirit reduced its losses down from $53 million in the red.

However, the unaudited results for FY24 also showed the company’s overall revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) fell, with the former dropping 1.6 per cent to $125 million and the latter down 69.2 per cent to $1.6 million.

In its ASX statement, Spirit said it experienced strong headwinds in the communication and collaboration segment “which was impacted by a significant slowdown in business spend, linked to multiple interest rate raises and a lack of small business confidence”.

“This combined with delays in the managed services restructuring program led to a disappointing result for FY24,” the company added.

Its managed services restructure, which was first announced in 2022, took two months longer than expected.

FY25 momentum gains

Despite this, Spirit experienced its strongest sales quarter in its history, with $42 million in total contract value wins and renewals during Q4, with more than $70 million in annual recurring revenue.

Its Intalock business, which was merged with Infotrust earlier this month, earned a record $7 million in revenue during the quarter, a rise of 55 per cent on the previously corresponding period, as well as $19.4 million in total contract value.

Spirit also said its managed services segment achieved its first profitable month in June with a total contract value of $5 million.

“After a challenging year focused on stabilising and restructuring managed services, these wins show Spirit commences FY25 with significant momentum and a strong base to grow our new market offerings,” Spirit managing director and CEO Julian Challingsworth added.