Datasquirt moves into Profit and Eliminates Cash-burn in Q4 FY11

May 31, 2011

The following is an extract from the Financial Statements that Datasquirt (ASX:DSQ) has lodged with the ASX this evening (for the full version, refer to the ASX site);

By the end of FY11 Datasquirt had eliminated cash burn as forecast and moved into profit for the fourth quarter. The company achieved this through growing revenue by 37%, excluding other revenue and foreign exchange gains and losses, making significant, strategic improvements in global distribution and by continuing to innovate, as well as through prudent cost management.

The adoption of Social Media channels as ‘business as usual’ for most corporations, the ongoing growth of SMS and web chat communication and the international interest in cloud-based technologies mean Datasquirt is well placed for FY12.

The company expects sales from both current and new clients to continue to increase. It also anticipates an ongoing growth in the strength of its reseller channel and has budgeted for an ongoing programme of product enhancement, to deliver further social media and reporting functionality in line with client demand.

September 2010 saw Datasquirt become one of the first companies in the world to offer corporations a call centre platform for managing their Twitter communications with customers. This created additional revenue streams from existing clients, such as Royal Mail Group (UK), as well as positioning Datasquirt as a future focussed provider and generating new business enquiries.

Demand from current clients during the 2011 financial year broadened from email and SMS to increased demand for the fax and web chat functionality in CONTACTTM, as well as social media. Corporate businesses increasingly recognise the commercial importance of integrated communications, while customer expectations for real-time replies and multi-channel communication are continually rising. Both these major trends are demand drivers for Datasquirt.

FY2011 saw continued growth in sales through reseller partners internationally, culminating in Q4 in the agreement to supply a leading North American call centre provider with CONTACTTM under their own branding; a deal worth over US$1million which will see Datasquirt’s software deployed across the US. The global technology search which preceded this organisation selecting CONTACT illustrates the quality and differentiation of the Datasquirt product set.

In a climate of ongoing economic uncertainty, corporate businesses are increasingly seeking pay-as-you go hosted (cloud-based) software solutions, such as CONTACT. They are increasingly driven by their customers to provide more sophisticated, integrated and real-time customer service, across multiple channels, and to be better than their competitors at responding to enquiries and complaints. In an environment where businesses want more efficiency, security and control, and are investing in products which offer a clear competitive advantage and good return on investment in the short to medium term,

Datasquirt is well placed for continued growth.

The Directors are very confident in the success of Datasquirt and will now be buying more shares.

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