FirstWave’s Telstra Revenue Set to Drop 66% in FY26 Despite Contract Renewal
FirstWave Cloud Technology has renewed its key email security agreement with Telstra, securing ISM-compliant services for federal agencies while preparing for a notable revenue decline offset by cost savings and growth via AWS.
- 12-month extension of Secure Internet Gateway agreement with Telstra
- Expected FY26 revenue from Telstra contracts to fall from $1.75M to $0.6M
- Products and Services Agreement extended by two months with minimal revenue impact
- Cost savings planned to offset reduced gross profit from Telstra agreements
- Strategic expansion through AWS Marketplace partnership with Corent Technology
Renewed Government Cybersecurity Contract
FirstWave Cloud Technology Limited has secured a 12-month extension to its Secure Internet Gateway (SIG) agreement with Telstra, commencing July 2025, with an additional one-year option. This contract provides ISM-compliant email security services to several Australian Federal Government agencies, reinforcing FirstWave’s role in delivering cybersecurity solutions aligned with the Australian Cyber Security Centre’s standards.
The renewal follows Telstra’s strategic closure of its GPA and CSX2 web and email platforms last year, which led to renegotiations of related agreements. While the Products and Services Agreement (PSA) with Telstra was initially set to expire at the end of June 2025, it has been extended by two months, generating a modest revenue contribution in the new financial year.
Revenue Impact and Cost Management
The combined effect of ending the PSA and the reduced scope of the SIG agreement means FirstWave expects revenue from Telstra contracts to decline significantly, from approximately $1.75 million in FY25 to around $0.6 million in FY26. This anticipated drop aligns with management’s prior guidance and reflects the company’s proactive approach to adjusting operational costs accordingly.
Importantly, FirstWave anticipates that cost savings will offset the gross profit loss from these contract changes, resulting in a positive impact on the bottom line. This disciplined financial management provides greater certainty for the company as it navigates a period of transition within its longstanding relationship with Telstra.
Diversification and Growth Opportunities
While Telstra remains a significant partner, FirstWave has successfully diversified its revenue streams in recent years, reducing reliance on any single customer. A key growth driver is the company’s CyberCision platform, which recently gained a boost through a partnership with Amazon Web Services (AWS) and Corent Technology.
This collaboration enables FirstWave’s software solutions, including AI-driven IT compliance tools, to be distributed globally via the AWS Marketplace. By leveraging AWS’s infrastructure and partner ecosystem, FirstWave aims to expand its market reach and streamline product deployment, provisioning, and billing processes.
Such strategic moves position FirstWave to capitalize on broader cloud adoption trends and the growing demand for cybersecurity solutions worldwide, potentially offsetting the revenue contraction from legacy agreements.
Bottom Line?
FirstWave’s contract renewal with Telstra secures near-term stability while its AWS partnership charts a promising path for future growth.
Questions in the middle?
- How quickly will revenue from the AWS Marketplace partnership ramp up to offset Telstra declines?
- What specific cost-saving measures will FirstWave implement to protect profitability?
- Could further contract renewals or expansions with Telstra or other government agencies emerge?
