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Netlinkz revenue surges 846% as secure enterprise cloud technology gains traction
Tue, 15th Sep 2020
FYI, this story is more than a year old

For most people VIN is either the French word for wine, or the number on a car engine. For the tech savvy, it stands for Virtual Invisible Network, an evolutionary step in virtual networking that can be used over any type of established public or private network, including the internet.

Behind the VIN is the $141 million capped ASX listed Netlinkz (ASX: NET), a company that has received numerous industry awards for its technology, including being a worldwide winner of the Global Security Challenge. Netlinkz's technology makes Fortune-500 cloud network security commercially available for organisations of all sizes.

This software developer has a presence in Australia. Its awards include the Telstra Innovation Challenge, Asia Pacific ICT Awards, APICTA Awards International Winner and Netlinkz was the first international company accepted into Cyber Incubator by Northrop Grumman (US).

Netlinkz' Virtual Secure Network (VSN) product evolved out of Netlinkz' Virtual Invisible Network, with the company now evolving into a leading global VSN company for blue chip corporations and government.

Multinational corporations taking up the company's VSN is excellent validation of the technology, and over time, these corporations are likely to deploy the VSN into other international markets in which they operate.

Further, telecommunication companies need to adapt to changing times and cybersecurity is becoming an increasingly important factor, so it is no wonder that Netlinkz ultra-high efficiency and premium security communications products are in demand.

Transformational change in train

While the company has been slowly building its presence and accolades, the last three weeks have contributed to a transformational change for the company.

Driving this is the appointment of former Australian ambassador to China, Dr Geoff Raby. He will be instrumental in furthering Netlinkz existing footprint in the Asia Pacific region and bringing further recognition to the company's technology.

Raby is well-connected in China, and this isn't his first board appointment in relation to an ASX-listed tech and communications company looking to expand its presence in the country.

He also brings important experience to the team in terms of dealing with big corporates through his company directorships with the likes of Yancoal, Oceana Gold and Fortescue Metals Group, with the latter having a robust relationship with China.

China forms the bedrock for Netlinkz' revenue growth

The success of Netlinkz technology is driving exceptional growth, with the company recently reporting fiscal 2020 sales of $5.25 million, up 846% on the previous corresponding period.

Revenue growth has been mainly attributable to rapidly increasing sales in China, however, the company has also entered the Indian market in a recent deal.

Importantly for investors with an eye to future growth, the $179 million capped company remains on track for its previously stated guidance of $15 million of customer receipts by year's end.

Investors are now catching on, with Netlinkz shares increasing more than 60% in the last month, including a surge of 27% on Monday.

Netlinkz is also benefiting from the increased focus on cybersecurity given the significant benefits that its technologies offer in this field.

Executive chairman James Tsiolis believes this growth is the start of something much bigger.

“The 2020 financial year has been a transformational one for Netlinkz and we now have in place the foundation to capitalise on the initiatives we undertook during the year to really fast-track growth in the current financial year and beyond,” Tsiolis said.

“We have market-leading VSN technology, an expanding global footprint, quality partners, a growing base of blue-chip and government customers, as well as other revenue streams and technologies that underpin this confidence.

“As such, Netlinkz is exceptionally well-positioned to capitalise and it has a very strong market advantage.

The China/India outlook

In order to capture the value of the potential market in China, Netlinkz has worked with large carriers like China Telecom, government authorities and established distributors, to develop a made for China business model which includes the necessary corporate, regulatory and legal infrastructures that satisfy the demands of enterprise businesses in China.

In simple terms this means that the IP developed for the VSN line of products is owned by iLinkAll, a Chinese company which Netlinkz owns 80% of in conjunction with Isoftstone, a major engineering technology development company with operations in China and around the world.

In late August, Netlinkz entered India and other international markets through a Master Services Agreement (MSA) signed with emerging technology software solutions provider Natsoft Corporation.

Founded in 2004 in the US and with a delivery centre in Hyderabad, India, Natsoft has a global network of offices staffed with more than 700 professionals. It delivers enterprise solutions and digital technologies like blockchain, robotics process automation, big data, artificial intelligence, industrial IoT and behavioural analytics solutions that seamlessly integrate into transactional systems.

Natsoft's customers include blue chip organisations such as Novartis, Equinox, Twitch, Sun Power, IBM, TechM, and Wipro.

Netlinkz has engaged Natsoft to develop and source selected international markets and customers through a reseller agreement for Netlinkz' products.

Part of the agreement also includes establishing an IoT Lab in Natsoft's offices in Singapore and India, as well as managing the software source codes for the company's VSN technology.

The decision to partner with Natsoft will deliver clear commercial benefits to both parties in a relatively short period of time.

India has been identified as the first high growth market opportunity, given many industries in that region are migrating to cloud service providers, which in turn increases demand for VSNs.

Tsiolis says of the agreement, “This partnership is a great opportunity to fast-track our organic growth in India and other international markets with a capable, well-established and highly regarded partner in Natsoft.

“While we continue to experience very high demand for our VSN technology in our existing markets, India represents a huge opportunity that we can quickly tap into without a huge upfront investment.

“We know the Natsoft team well and there are some promising near-term customer opportunities that we will aggressively pursue.

Netlinkz is now aggressively pursuing sales in several regions with medium and large enterprise engagements, as the VSN is more saleable for enterprise-grade corporations and government customers.

For the remainder of the December half, the company will focus on continuing to enhance the VSN and VIN technology, introducing additional features to provide flexibility and scalability for secure enterprise network solutions.