NetLinkz (ASX:NET) - networking specialist


by Rachael Jones

NetLinkz Limited (ASX:NET) Executive Chairman & CEO James Tsiolis provides an update on the company's suite of networking solutions, the market opportunity and progress with partners.

Rachael Jones:
Hello, I'm Rachael Jones for the Finance News Network. Joining me today from NetLinkz (ASX:NET) is executive chairman and CEO, James Tsiolis. James, welcome back to FNN.

James Tsiolis: Thank you for having me back, Rachael.

Rachael Jones: Now, James, for new investors, could you provide a quick introduction to the company and let us know about your product suite?

James Tsiolis: The company is listed on the ASX as everyone knows. It has a market cap of approximately $100 million dollars. Our core product is driven by what we call a invisible network. So we create mesh networks that power household networks, business networks, large enterprise networks, and it's all encrypted. It's all IP, so we own the product and the IP, not just a distributor of the product. We actually are the inventor of the product.

Rachael Jones: Thanks, James. Now, could you let us know how progress is going?

James Tsiolis: Well, the company, as of the end of March, reported a total revenue of $2.1 million. So we've started our sales now. Since I last was on the show, we've started sales in China and also in Australia. We acquired a business called SSI, which, again, deals with telcos and government.

 In addition to that, I think the coronavirus has made our product more relevant, because everyone's starting to work from home. Because we create networks which connect people from remote locations back to a central point, and we do that encrypted or invisibly, our product has become much more relevant in this environment. So we're thriving in the current situation.

Rachael Jones: Yes. We're definitely seeing a lot of change at the moment.

 Now, let's talk about your sales and strategy. Can you tell us more, starting with the virtual secure network?

James Tsiolis: Well, again, since the last time I appeared, we have now three defined products, the VIN, which was a product out of Australia which we took to China. But then what we did in China is recreated the VIN as the VSN Lite. So we've gone from an Australian product, which was effectively for small to medium enterprise, and basically focused on securing a laptop back to, if I can call it, a home base, being the office. We're now with VSN Lite, we're able to connect all sorts of devices. So it's Android and iOS enabled, so that makes it very relevant to people wanting to use their mobile device other than their laptop.

 We've then developed the VSN, which is the large enterprise solution. So that's what we call the full SD-WAN solution, which still does meshing on the edge, that offers all the flexibility; but what we're doing is, we're connecting many, many thousands of devices at any one time. That also then connects that mesh network on the edge to a cloud or back to a central cloud in head office, for example.

So well, we have now three defined products, which, one, being the VIN, is an Australian product. The VSN Lite and VSN have started as Chinese product, but then there'll be knowledge transfer, and that will come back to Australia where we will redesign the VIN that will then factor into Android as well as iOS. The VSN will be also then knowledge transferred back to Australia. So there's a lot of IP that's been created as part of our R&D in China.

Rachael Jones: Now, let's talk about your financials, James. Could you provide a snapshot?

James Tsiolis: As per the 4C that we released to the market, we've now invested just over $4 million in our Chinese subsidiary. We expect that money to give the Chinese subsidiary an 18-month runway to continue to build revenue. As we're seeing in its first quarter, the revenue was significant.

The company in Australia, the listed company and its businesses, SSI is in a good position. We expect more sales to be coming out of that in the current quarter, in the next two quarters, and so on and so forth. But we're seeing some good developments there.

I guess the one aspect that we're doing now with the SSI team is we're developing NetLinkz Global, which will become the sales organization. Again, as of the end of March, we're sitting on cash of about $3-odd million. So that should see us in a reasonably good position to continue to develop sales for Australia. So NetLinkz Global's the one to watch out for now as we start to commercialize the pilots that are occurring in Australia.

So I think for us, the next 12 months and beyond are going to be very exciting as the company is starting its whole sales focus. So we're transitioning away from just being a developer, an R&D firm, now into a firm that's commercializing its IP.

Rachael Jones: It definitely sounds like you've certainly got a lot going on there. James Tsiolis, thanks so much for the update today.

James Tsiolis: Thank you for having me again. Thank you, Rachael.