Ava Risk Group Reports 4% Q3 Sales Growth, $7.4M Backlog Boosts Outlook
Ava Risk Group reported a solid Q3 FY2025 with $6.5 million in sales orders and a key new contract with Telstra for subsea cable protection, setting the stage for accelerated growth in Q4.
- Q3 sales order intake of $6.5 million, up 4% year-on-year
- Year-to-date sales order intake of $22.8 million, slightly below prior year due to delayed orders
- Confirmed sales order backlog of $7.4 million including $2.5 million in recurring revenue
- Significant Q4 order from Telstra for Aura Ai-X subsea cable monitoring system
- Strong sales pipeline with expected acceleration in Q4, especially in telecommunications and transport sectors
Q3 Performance Overview
Ava Risk Group Limited (ASX: AVA) has delivered a steady trading update for the third quarter of FY2025, reporting a sales order intake of $6.5 million. This represents a 4% increase compared to the same period last year, reflecting resilience amid some geopolitical headwinds. Year-to-date sales orders total $22.8 million, slightly down from $25.6 million in the prior year, primarily due to the deferral of several significant orders into Q4 and the absence of a large $2.7 million pipeline order from Chile recorded last year.
The company’s confirmed sales order backlog stands at $7.4 million, which includes $2.5 million in contracted annual recurring revenue. This backlog comprises both equipment orders and multi-year service contracts, underpinning a stable revenue base moving forward.
Segment Highlights and Market Dynamics
The Detect segment, which focuses on smart fibre optic sensing systems, showed an 18% increase in Q3 sales orders to $3.8 million, although year-to-date intake was slightly lower due to last year’s exceptional Chile order. This segment remains a key growth driver, with a robust pipeline in telecommunications and transport infrastructure. Notably, the company is advancing deployments of its Aura Ai-X system in rail projects and sovereign border protection, with several North American security contracts delayed by political uncertainty expected to close in Q4.
Access segment sales were $0.8 million in Q3, with year-to-date orders at $3.1 million. The segment’s growth is anticipated to accelerate through the dormakaba distribution network in the United States, following a softer comparative period last year that included an initial stocking order.
Illuminate, specialising in illuminators and perimeter detection, posted a strong Q3 with $1.8 million in orders, up 17% year-on-year, and a 7% increase year-to-date. Expansion efforts in North America and Asia Pacific are complementing the company’s broader technology suite.
Strategic Milestone: Telstra Subsea Cable Order
CEO Mal Maginnis highlighted the importance of this development, noting the company’s investment in technology and commercial capabilities to meet telecommunications sector requirements. The Telstra order is the first meaningful contract under their supply agreement and signals strong potential for further growth in this sector both domestically and internationally.
Outlook and Market Positioning
Looking ahead, Ava Risk Group remains confident in delivering solid revenue and EBITDA growth for FY2025. Management has provided guidance for second-half revenue in the range of $18 million to $21 million, with the range contingent on project delivery timing. The company’s strong sales pipeline and backlog, combined with strategic wins like the Telstra subsea cable order, position it well to capitalize on emerging opportunities in transport, telecommunications, and security sectors.
While geopolitical instability has caused some order delays, the company’s diversified portfolio and recurring revenue streams provide a buffer against market volatility. Investors will be watching closely how Q4 unfolds, particularly the closure of delayed contracts and the execution of new projects.
Bottom Line?
Ava Risk Group’s Q3 resilience and Telstra contract set the stage for a pivotal Q4 and sustained growth trajectory.
Questions in the middle?
- How will geopolitical uncertainties in North America and Europe impact Q4 order closures?
- What is the potential scale and timeline for growth in the telecommunications segment beyond the Telstra order?
- How effectively can Ava leverage the dormakaba network to accelerate Access segment sales in the US?
