Financial software provider Silverlake Axis has reported revenue of RM140.9 million for its 3QFY21 ended March, down 7% y-o-y. However, earnings increased by 51% in the same period to RM38.7 million, thanks to other income in the form of government subsidies and rental concessions.
The company warns that because of the on-going pandemic, the next few quarters will still be “dominated by the continuing uncertainty”.
However, it claims to see certain bright spots emerging. For one, the industry has come to realise that there is no quick end to the pandemic and they have started to budget and plan for an expansionary future with the virus as the new normal.
While Silverlake Axis’ customers including the banks remain cost-sensitive, they are going ahead with their digital transformation.
SEE:Analysts slightly pessimistic on Silverlake Axis after 2Q results come in below expectations
The company has also introduced a new pricing strategy as it pivots from upfront license and implementation fee structure to a build-operate-transform-transfer model which gives more revenue visibility over multi-years.
The company is also constantly finding ways it can work with its customers. “Large deals remain a challenge as pressure to conserve and extract efficiencies continue to be a defining theme, however, we are well-positioned to capitalise on incremental enhancements and the next wave of large ticket projects when the situation improves,” the company says.
“Our deal conversion in Q3 FY2021 was equivalent to that achieved in Q2 FY2020 and we see encouraging signs from customer enquiries from our installed base and from new accounts. As a consequence, our deal pipeline remains robust going into Q4 FY2021 without any significant attrition due to macroeconomic conditions,” it adds.
In a separate announcement, Silverlake Axis said it has won contracts from 26 of its existing customers during the third quarter of financial period ended 31 March 2021.
The contracts are mainly to enhance the existing core banking system and to enhance customers’ digital experience. They are expected to be completed within 12 to 18 months from the signing of the contracts.
These customers include 5 large regional banking franchises in Asean, 6 local banks and a government-linked company and a financial service provider in Malaysia, 2 banks in Indonesia, 2 banks in Kenya, a bank in Thailand, Vietnam, China, United Arab Emirates, United Kingdom, Sri Lanka, Maldives and Egypt respectively, a public services agency in Moldova.
Silverlake Axis shares closed May 11 unchanged at 24 cents.
