Friday 06 May 2016 09:18 AM
SLI Systems revenues to stall on customer losses
By Jonathan Underhill
May 6 (BusinessDesk) - SLI Systems said annual recurring revenue growth is likely to stall in its full-year after the
loss of three customers but the online retail search engine developer doesn't expect to need to raise more capital to
reach breakeven.
The forecast for ARR, its preferred growth measure, for the year ending June 30 comes after the Christchurch-based
company in February posted first-half ARR growth of 23 percent to $35.6 million and a 30 percent gain in operating
revenue to $17.4 million, while narrowing its loss to $502,000.
For the full year, ARR "will be relatively flat compared to June 2015, primarily due to the loss of three large
customers," the company said. Operating revenue was expected to rise 25 percent to $35 million, a record for the
company, SLI said.
Chief executive Chris Brennan said two of the losses were the result of insolvencies and the third reflected a change of
ownership of a company and the new owners' decision to use its own infrastructure.
"This is not a reflection on the market or SLI’s products, but rather extenuating circumstances that are unusual and
beyond the company's control,” Brennan said.
Brennan didn't identify the lost customers. He was named chief executive in September last year, replacing founding
chief executive Shaun Ryan, who became chief innovation officer.
SLI shares soared about 50 percent in the two weeks following its first-half results and last traded at $1.05. However,
it has been a disappointing ride for investors since its 2013 initial public offering at $1.50 a share and for those who
bought the stock at its January 2014 peak of $2.90.
The software developer missed its sales forecast for the second half of the 2015 year but said at the time it was
optimistic Brennan and fellow Silicon Valley veteran Martin Onofrio, the chief revenue officer, would drive revenue and
earnings growth.
Brennan said today that SLI has cash of $6.3 million, up from $5.6 million at June 30 last year and "will not need to
raise additional capital to achieve cash flow break-even performance."
(BusinessDesk)
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