Activeport Cuts Costs $1.37M as SaaS Revenue Falls, Betting on Software Growth

Strong Software Growth Amid Strategic Restructuring

Activeport Group Ltd (ASX: ATV) delivered a mixed but promising quarterly performance for Q3 ending March 31, 2025. The company’s software revenue surged by 49.3%, reflecting the successful closing of two significant licensing deals and deployments in key markets including India and Australia. This growth contrasts with a 21.2% decline in Software as a Service (SaaS) revenue, a result of a deliberate restructuring that eliminated low-margin legacy products and reduced headcount to sharpen focus on higher-margin software licensing and SaaS offerings.

The restructuring has already yielded tangible benefits, with quarterly operating expenses and staff costs reduced by $1.37 million, underscoring management’s commitment to improving profitability and operational efficiency.

Expanding Footprint in Asia and Australia

Activeport’s strategic wins include a contract with one of Asia’s largest tier-1 telecommunications companies to deliver a self-service portal for network-to-network services, set to go live in May. In India, the company secured a competitive contract to provide network management and orchestration software for a mid-sized ISP managing 12,000 provider-edge devices and multiple cloud nodes. This deal notably outperformed major international vendors on features, functionality, and price.

Further bolstering its presence, Activeport deployed GPU orchestration software to India’s largest telco and began rolling out compute modules for cloud gaming with India’s largest mobile network operator. This initiative could scale to become one of the world’s largest GPU deployments, potentially reaching tens or hundreds of millions of consumers streaming games via Activeport’s platform.

Innovative Technology Launches and Product Developments

The quarter also saw the commissioning of a new Network as a Service (NaaS) platform and the deployment of an innovative Starlink enterprise network backup solution for a major Australian iron ore operator. Activeport’s unique MPLS integration over Starlink is gaining traction as enterprise demand for satellite network integration grows.

On the R&D front, the company completed delivery of its Compute Platform version 3.0, supporting automated bare-metal GPU server deployment and management across distributed clusters. Alpha testing commenced on version 4.0 of its streaming engine, designed to enhance cloud gaming performance and reduce costs per interactive stream, critical for low average revenue per user (ARPU) markets.

Additionally, Activeport migrated its SaaS platform to Google Cloud Services in Singapore to optimize cost and performance for international customers, and integrated Fibreconx’s API to enable self-service ordering of dark fibre circuits, enhancing its Global Edge NaaS offering.

Financial Position and Outlook

Despite the decline in SaaS revenue, overall group revenue was $2.17 million, down 14% from the prior quarter, reflecting the phasing out of low-margin legacy products. The software business, however, showed robust growth and zero churn, with expectations for continued momentum as new customers onboard in Q4.

Cash flow remained negative but improved, with operating cash used reduced by 32.2% to $1.37 million. The company ended the quarter with $1.32 million in cash and $1.78 million in unused financing facilities, providing an estimated 2.3 quarters of funding at current burn rates.

Activeport also disclosed the issuance of Zero Exercise Price Options (ZEPOs) with vesting tied to share price milestones, potentially aligning management incentives with shareholder value creation over the next two years.

Collectively, these developments position Activeport for a potentially strong Q4 and beyond, as new product deployments and strategic contracts begin to translate into recurring revenue growth.