Legal Dispute with Bloom Clouds Gathid’s Physical Security Sale
Gathid Ltd reported a robust 14% quarterly increase in Annual Recurring Revenue to $1.936 million, driven by new customer wins and expansions, even as a legal dispute over its physical security business sale remains unresolved.
- ARR climbs 14% in Q4 to $1.936 million, up 176% year-on-year
- Two new customers added, plus expansion of a US client subscription
- Cash reserves steady at $4.72 million despite ongoing legal costs
- Dispute with buyer Bloom over sale completion statement escalates to court
- Board confident in SaaS platform growth and managing costs prudently
Strong Recurring Revenue Growth
Gathid Ltd has continued its impressive growth trajectory in the 2025 financial year’s final quarter, reporting a 14% increase in Annual Recurring Revenue (ARR) to $1.936 million as of June 2025. This marks a remarkable 176% increase compared to the same period last year, underscoring the company’s successful expansion in the competitive SaaS market.
The growth was fueled by the acquisition of two new enterprise customers in the logistics and healthcare sectors, as well as an expansion of an existing US-based customer’s subscription. Additionally, the company maintained a high renewal rate with two customers renewing their annual contracts, reflecting strong customer satisfaction and platform value.
Cash Position and Operating Costs
Despite the growth in ARR, Gathid’s cash and cash equivalents slightly declined to $4.72 million from $4.94 million in the previous quarter. The company reported a net cash outflow from operating activities of $209,000, an improvement from the prior quarter’s outflow. This was achieved despite increased staff costs due to strategic hires and pay reviews, particularly in North America, aimed at accelerating platform development and sales capabilities.
Ongoing costs related to the divestment of its physical security business, including legal and advisory fees, also impacted cash flow. These expenses are tied to the unresolved dispute with the buyer, Bloom, over the final sale completion statement.
Legal Dispute Clouds Divestment
The sale of Gathid’s physical security business, completed in September 2023, has been overshadowed by a protracted legal dispute. The disagreement centers on the buyer’s calculation of the completion statement, with Bloom claiming Gathid owes $666,891, a figure Gathid disputes. Gathid has counterclaimed damages exceeding $2.2 million, citing disagreements over inventory valuation and excess annual leave treatment.
The dispute has escalated to court proceedings, with no clear resolution timeline. This uncertainty poses a material risk to the company’s financial outlook and remains a key focus for management and the board.
Market Expansion and Strategic Outlook
Beyond the legal challenges, Gathid is actively pursuing growth opportunities across multiple geographies, including Asia, Australia/Oceania, the UK, and the USA. The company’s marketing efforts and targeted event participation have generated a healthy sales pipeline, with several prospects nearing contract finalization.
The board remains confident in the SaaS platform’s ability to deliver value and sustain growth while maintaining disciplined cost management. Plans for measured headcount increases are in place to support product development and customer service, aligning with the sales cycle to optimize market responsiveness.
ASX Relisting and Future Considerations
Gathid is currently engaging with the ASX regarding the requirements for relisting, signaling a potential return to the public market once the legal dispute is resolved. The board continues to evaluate all strategic options to maximize shareholder value, balancing growth ambitions with prudent financial stewardship.
Bottom Line?
As Gathid pushes forward with strong SaaS growth, the resolution of its legal dispute will be pivotal in shaping its next chapter.
Questions in the middle?
- How will the ongoing legal dispute with Bloom ultimately impact Gathid’s financial position?
- What is the timeline and likelihood for resolution or settlement of the physical security business sale dispute?
- Can Gathid sustain its rapid ARR growth while managing increased operational costs and expanding internationally?
