FirstWave chief leaves role amid top tier shuffle
- 20 November, 2019 12:44
FirstWave COO, David Kirton.
Publicly listed cloud security platform, FirstWave Cloud Technology (FCT) has made a series of executive changes, with CEO David Kirton vacating the top spot and taking up COO duties.
Current COO, Neil Pollock will move into the role of CRO based out of Singapore while current CFO Jason Singh has resigned.
In a detailed address to shareholders, Kirton said his decision was driven by a combination of factors.
“The first and most relevant for investors is that FCT has a very busy six to nine months ahead of it and the talent we have in the company must be directed to maximising the opportunities we have,” Kirton said.
“Managing a public company with global opportunity out of North Sydney is exciting and challenging but it involves long hours and a lot availability. It’s an 18x7 job and demanding both physically and intellectually.
“On top of this, as CEO, the market-facing workload has been very demanding, and I have increasingly found it difficult to balance investor, customer, employee and my family’s needs with my own personal well-being.”
Kirton said the changes do not manifest from any reduction in his current commitment to the company or perception of opportunities that lay ahead.
Executive chairman John Grant said the company will wait for the right time to make a decision on a replacement, considering the international opportunities ahead for the company.
While providing more clarity on its progress towards revenue, Grant also moved to quash shareholder concerns in that it continues to ‘burn too much cash’ and overheads were too high; current cash flow projections; lack of indication on revenue timing or quantum and concerns surrounding its operational execution.
“Firstly cash burn, and by the way, I hate that term -- it implies wasting money which is precisely what we’re not doing,” Grant said. “Last year investment exceeded revenue -- $21 million of investment against $9 million revenue -- and we continue to track around this rate in Q1.
"That investment is laid out over 80 people across the business with 67 engaged in delivering the solution to our partners and their customers.”
With regards to accurately forecasting revenue, Grant explained it was a ‘numbers game’ in building up the number of channel partners will ultimately build momentum and deliver significant revenue growth.
Furthermore, Grant clarified its previous projection of having a line of sight through existing Tier 1 partners to $45 million in annualised recurring revenue (ARR) and said it has line of sight over five to seven international partners with the potential to deliver June 2020 ARR of $3 million, in comparison with the first quarter’s $58,000.
“Let me stress that this is not a guidance. It is an informed view of immediate opportunity and as you might imagine, given the disappointment that has flowed from previous revenue targets, there was a good deal of soul-searching done in deciding to share this with you now, but we see there is a very specific difference on this occasion - this can be directly referenced to very specific partner pipeline not a general market,” Grant explained.
“We are closer than FCT has ever been to securing recurring international revenue and if it does not come exactly in this timing or quantum, we believe it will come.”
Grant said it had also taken steps to reduce investment levels by about $2 million annualised, and has made a strategic decision to focus on product development in the second half on its cloud content security orchestration platform (CCSP) for Cisco and only existing products on CCSP, while new products will be put on hold for the remainder of the year.
Kirton said its OEM licensing and development with Cisco has seen the pipeline grow to more than 20 opportunities, having secured its first billing milestone and live customer traffic in October.
“While we have been able to achieve this milestone for both Cisco and non-Cisco customers on the public platform, this is the first on-premises deployment and is the true essence of our strategic aspiration for the platform and FCT,” Kirton said.
Kirton said in addition to its deployments in EMEA and North America, it was currently deploying platforms in Germany and North America.
“All this sales activity is increasing our confidence that this year will be the year that our relationship with Cisco matures into a scalable and recurring revenue stream,” he said.
“While there is a lot happening in our relationship with Cisco, the same is also true in other partner relationships we have been building. We now have 25 opportunities in the pipeline globally.”
In September FirstWave successfully raised $6.6 million in capital.
The company has also opened for shareholders to apply in a share purchase plan (SPP) of up to $30,000 that will be issued on 25 November.
At the time Grant said it had a significant opportunity ahead and reassured shareholders that it was committed to meeting their reasonable expectations.