Earnings call transcript: Cirata Q3 2025 sees strategic shifts and stock uptick

Cirata PLC’s Q3 2025 earnings call revealed significant strategic shifts alongside a modest stock price increase of 2.17%. The company is transitioning towards a data integration focus, which is reflected in its operational restructuring and new product launches. Recent market data from InvestingPro shows the stock has gained an impressive 13.86% over the past week, with current analysis indicating the stock is slightly undervalued based on Fair Value metrics. The company’s beta of 1.34 suggests higher volatility than the broader market, making it crucial for investors to stay informed about market movements.

Key Takeaways

• Cirata is focusing on data integration and enterprise data orchestration.
• The company launched Serata Symphony, a new data orchestration platform.
• Strategic divestment of DevOps assets to BlueOptima.
• Appointment of Dominic Okari as Chief Revenue Officer to drive growth.
• Achieved the largest direct contract in company history worth $3.1 million.

Company Performance

Cirata reported substantial growth in its data integration bookings, which increased by 220% year-over-year in the first half of the year. The company’s overall bookings for the first three quarters grew over 40% compared to the previous year. InvestingPro data reveals impressive revenue growth of 87.75% over the last twelve months, supported by an exceptional gross profit margin of 93.74%. This growth aligns with Cirata’s strategic shift towards focusing on data integration and enterprise data orchestration, areas that are seeing increased demand in the market.

Financial Highlights

• Cash balance as of September 30: $5.4 million.
• Annualized overheads reduced to $12-13 million, a 70% decrease from peak levels.
• Cost base reduced from $45 million to $12-13 million.
• Largest direct contract secured: $3.1 million with a US insurer.

Outlook & Guidance

Cirata is targeting a back-end loaded fiscal year with expectations of reaching cash flow breakeven. The company is focusing on new customer acquisition and preparing for growth in FY26. Quarterly cost overheads are trending towards $3 million, reflecting ongoing cost management efforts.

Executive Commentary

CEO Stephen emphasized the company’s strategic focus, stating, "Strategy is delivery," and highlighted the importance of growth with the comment, "Quality growth really does cure most evils." These statements underscore Cirata’s commitment to executing its strategic vision and achieving sustainable growth.

Risks and Challenges

• Transition to a data integration focus may face execution risks.
• Market competition in data orchestration and integration is intensifying.
• Economic uncertainties could impact customer budgets and spending.
• The restructuring of the sales team may temporarily affect sales momentum.
• Dependence on large contracts could pose revenue concentration risks.

Cirata’s Q3 2025 earnings call showcased its strategic pivot towards data integration and highlighted operational efficiencies. With a clear focus on growth and new customer acquisition, the company aims to strengthen its market position and achieve financial sustainability.

Full transcript - Cirata PLC (CRTA) Q3 2025:

Stephen, CEO or Senior Executive, Serata: Today, I’ll provide an update on Serata’s trading performance for the third quarter of fiscal year FY twenty five. I’ll also outline our transition from a two product company to a data orchestration business and our evolution into a growth focused organization by highlighting key progress, achievements, challenges, and our outlook as we enter Q4. Q3 FY twenty twenty five delivered strong strategic progress for the company with the successful divestment of the DevOps assets, continued cost optimization and enhanced operating leverage, the launch of Serata Symphony and the appointment of Dominic Okari as chief revenue officer to strengthen the leadership team and the go to market. Furthermore, the beginning of q four saw the announcement of the largest direct data integration contract in the company’s history. Let me drill down into that key list of activity.

I believe that strategy is best delivered through strong execution. A phrase that resonates is strategy is delivery. The company needs to continue the growth of the data integration business through expansion of existing customers and importantly, new customer acquisition. This quarter, Serata continued to make meaningful progress in our data integration business. De risking contracts in flight during our Chief Revenue Officer transition and Serata Symphony launch has been our number one priority.

Whilst total bookings were in line with management expectations, the timing of a contract completion has influenced our quarterly results. We signaled at the start of FY twenty five and have been consistent throughout the year, f y twenty five would be back end loaded. Notably, however, the company has good early momentum into q four. Serata signed a 3,100,000.0 multi year data integration contract with a leading US insurer. This is the largest direct contract in Serata’s history, marking a significant milestone for LiveData Migrator product and reflecting the long term customer commitment as they transition from our legacy Fusion platform to LiveData Migrator.

Now looking back at q three. In August, Serata successfully completed the divestment of the DevOps assets to BlueOptima. This transaction allows the company to focus fully on the core growth driver, data integration, while also providing additional financial flexibility. To remind us, data integration bookings grew in h one by 220% year over year, and this is the source of future growth. This was followed towards the end of q three with the launch of Serata Symphony, the company’s new data orchestration platform.

This expands Serata’s sales reach and addressable market. The platform is a central component of the company’s strategy to modernize enterprise data orchestration, enabling organizations to manage, integrate, and operationalize data with greater efficiency and scale. The customer centered development of the Serala Symphony platform has been led by our chief technology officer, Paul Scott Murphy. Paul has been talking with key customers directly involved in the development of Serata Symphony throughout FY twenty five. Important strategic customer relationships will continue to provide an environment for collaboration on future Serata data orchestration platform functionality.

On the financial front, cost realignment remains on track with annualized overheads reduced to 12 to $13,000,000 as we enter q four, over 70% lower than the peak and at comparable revenue levels. Cash burn has declined year on year and the unaudited cash balance as of September 30 was $5,400,000, underpinning the company’s progress towards breakeven and sustainable growth. For the first time since its IPO, Serata is operating on a sustainable cost base. With the focused development of LiveDataMigrator and the launch of Serata Symphony, the company is strategically positioned to capture significant opportunities in a large and expanding market. More importantly, the company now has a clear and focused path for growth.

I’d also like to take a moment to recognize the contribution of Allard, who was a founder of the company, as he transitions to his ambassadorial and consulting role for the company. He continues to be an important voice as Serato shapes the vision for the future of the company. Looking ahead, the outlook remains unchanged. Bookings are expected to be back end weighted as evidenced by our early momentum into Q4. Given the hard won streamlined cost structure, blue chip customer base and focused product strategy, management is confident of Serata’s ability to demonstrate operating leverage and future growth.

Thank you for your continued support. We look forward to keeping you updated as we progress through Q4 and beyond.

Analyst/Interviewer: Stephen, thank you for the presentation. Let’s just run through some questions. The $3,100,000 contract with The US insurer is the largest direct contract in Serata’s history. Can you provide some more detail on how this relationship might expand in the future and whether similar opportunities are in the pipeline?

Stephen, CEO or Senior Executive, Serata: Yes, sure. There’s a number of reasons we believe this to be an important development for Serata. I think we could and should be doing more in the disaster recovery space, and we see opportunities for that both with Live Data Migrator and Serata Symphony. Data recovery has really hit the headlines, with the spate of recent cyber attacks, particularly on retail, financial services, and automotive companies that have been in the news. Data security is increasingly an important area for the enterprise.

Secondly, obviously, we’re pleased that this customer not only elected to go with our Live Data Mining Greater offering, but also extended the term to a multi year contract. Clearly, all our existing customers are potential points of growth for the company, and this is further evidence that our expansion strategy is working.

Analyst/Interviewer: Now, Stephen, slippage would again seem to be a concern for q three. Can you give investors confidence that these issues are being addressed?

Stephen, CEO or Senior Executive, Serata: Yes. In the past, I’ve made no secret of my disappointment with the contract management process in the go to market team since I arrived, actually. It was in fact a catalyst for wholesale go to market changes, which now have been completed, and I’m really pleased to see the go to market with our chief revenue officer being led by Dominic Arkari. This quarter, we’ve had several competing priorities. The ongoing, restructuring in the go to market, Dominic’s appointment, the new product launch of Serana Symphony, the dev op sale, and also the cost restructuring that we’ve gone through.

Through all of that, we made sure that the key in flight contracts were not compromised. Dominic only joined in July and has done an excellent job getting his arms around those challenges. He personally led The US insurer contract that we announced and is quickly rebuilding the sales team. And as stated in our r and s, the pipeline is growing and improving in quality. That said, I won’t sugarcoat the quarter.

DevOps renewals no longer contributed post divestment, and the major data integration contract we expected in q three closed just eight working days after the quarter end. It’s worth noting, however, that only 10% of UK public companies report quarterly, but we chose to report quarterly because of transparency and discipline they matter to us. Also, importantly, this quarterly cadence drives good discipline in the go to market business and exposes weaknesses where they exist. It’s been a necessary albeit painful part of the rebuild of the go to market function internally and establishing the basis for a predictable and scalable growth business. Only one person remains from the original sales and sales consulting teams.

The new go to market team understands that Serato is building a high performance culture. Our goal is clear, a sales capability that can manage customer close cycles predictably with broader and deeper quarter end pipelines. We’re making strong progress towards that.

Analyst/Interviewer: So tell us, how has your new chief revenue officer impacted the business?

Stephen, CEO or Senior Executive, Serata: It’s still early days, but Dominic has already brought a real discipline and cadence to sales, marketing, sales consultant, all the go to market functions. His arrival represents a clear step change for us. It’s encouraging that he personally led the recent US insurer contract win that we announced this week, and his sales model is already having an impact. If I reflect for a moment, it’s taken longer than I expected in a smaller company to rewire every part of the organization around customer obsession, growth, and innovation. With a turnaround of this scale, sometimes if you can’t change the people, you just have to change the people.

And I wanted to set up everybody for success, starting with sales. Quality growth really does cure most evils. So I’m really pleased with how Dominic has hit the ground running in his first three months. He’s deepening customer relations and staying focused on the holy grail of new customer wins, customer acquisition. There’s still plenty to do, but the signs of progress are clear.

Analyst/Interviewer: We’ve seen Serata successfully closed the sale of the DevOps assets in the quarter. What’s different now about Serata?

Stephen, CEO or Senior Executive, Serata: Well, as we discussed last time, the sale of the DevOps assets gives the company focus. We made no secret of the fact that data integration is the key growth driver for the business. The launch of Serata Symphony of our data orchestration platform underpins that focus. DevOps was largely a renewals business characterized by larger numbers of small scale contracts. Serata is not of a scale to manage two very different businesses.

The Serata data integration business will be characterized by larger scale contracts, so fewer in volume and number of contracts, offset by the size. Going forward, the KPIs that we’ll be sharing with the investment community will communicate not only total bookings in our quarter TCV, total contract value, but also annual contract bookings, ACV, where there is a closer correlation to the timing of cash collections. This will give investors a clearer understanding of the growth of the continuing operations of data integration and the impact of these multi year contracts are having on our visibility as we start to scale.

Analyst/Interviewer: So, Steven, can you say a bit more about the introduction of Serato Symphony to the market?

Stephen, CEO or Senior Executive, Serata: I’m really proud of the team’s focus on hitting the timelines for Serato Symphony delivery. Obviously, this is very early days, but the inbound interest level has been really encouraging. The product development led by Paul Scott Murphy, our chief technology officer, has been informed entirely throughout the process with strong customer engagement that began well before the start of this year. Historically, we built products in a vacuum and with some good engineering, but detached from customer realities. We often failed to close the loop between technology and its applicability, resulting in gaps on the product market fit.

Paul’s customer led process and approach has allowed us to align customer priorities in the development of Serata Symphony. The team have worked hard on both Live Data Migrator and now Serata Symphony to ensure relevance and usability for extremely demanding customer environments and workloads. However, as I stated earlier, it’s important to make clear that nothing in flight for our f y twenty five bookings plan is impacted by the new product launch. Serato Symphony will be helping to drive our growth customers and new customer strategy as we move into f y twenty six. As an aside, we put some links in the r and s release today that will take you to some great content on the website describing Serato Symphony.

Analyst/Interviewer: How should investors think about the timing of bookings in q four and into f y twenty six? Do you expect more lumpiness or steadier momentum?

Stephen, CEO or Senior Executive, Serata: We’ve reiterated our outlook several times this year, and I flagged that it would be back end weighted. To be candid, our revenue progression is likely to be lumpy until we have a wider base contributing to our top line. The top three bank from last Q4 FY24, the large UK retailer in Q1 FY25, and The US insurer just announced are all multimillion dollar contracts. The challenge for us simply put is to do more of them. It’s clear that the expansion of customers as part of the strategy is working as customers deploy Serata technology successfully.

Customer appetite for Serata products grows accordingly. We need to crack the code on securing new customers, new customer acquisition, and this is a key priority. Using a gardening metaphor, the company will plant new acorns each quarter, cultivating them into future oak trees. They represent substantial long term growth and revenue opportunities.

Analyst/Interviewer: You’ve mentioned operating leverage. Can you expand on what you mean by that?

Stephen, CEO or Senior Executive, Serata: I think there’s clearly data developing to support a strong hypothesis of operating leverage. The cost base has reduced from the peak of 45,000,000 to between 12,000,000 and 13,000,000, which represents over 70% reduction in expenses. This means we’re operating with less than 30% of the baseline cost from its peak. The top line in FY twenty three and FY twenty four was flat. However, in the first half of FY twenty five, the data integration bookings grew by more than 200%.

We’ve just emerged from q three, f y twenty five, and the combination of q one, q two, and q three bookings grew by over 40% year on year. And additionally, we’ve early momentum in q four. All of this coming from our data integration products, which is the strategic focus for the business. In addition, with the divestment of the DevOps business, we should start to see the data integration growth amplify. We’re not getting ahead of ourselves and realize we’ve tons more to prove, but the data points to progress.

Analyst/Interviewer: Now finally, Steven, we do have to address the question of sustainability and cash. The lumpiness of the business must give you concerns about the timing of cash and therefore the sustainability of the business.

Stephen, CEO or Senior Executive, Serata: I think we have to consider how different this business is relative to the one we inherited in FY twenty three. As I’ve said earlier, we’ve taken out over 70 of the cost base from the peak. We’re now growing our bookings, and we think cash flow breakeven is within sight. Did I think we could get here faster? Yes.

Candidly, I did. But we’re now in a place where we get to shape our own future. Controlled cost overheads now trending towards $3,000,000 per quarter. Product acceptance and strong support from key customers, and the focused product strategy leading with Serato Symphony. Everything is now in place for sustainable growth.

We now need to execute.

Analyst/Interviewer: Stephen, thank you.

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