Another loss for Bulletproof but profits getting better

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Another loss for Bulletproof but profits getting better

Cloud hosting provider Bulletproof improved its profitability in the first six months of the year, amid ongoing acquisition talks with Macquarie Telecom and AC3.

Bulletproof's revenue fell 4.9 percent to $23.3 million but its underlying earnings improved from a $400,000 loss to a $1.9 million positive EBITDA.

The company recorded an underlying net loss of $1.3 million, which was an improvement from a $5.4 million loss in the same period last year. Shares were trading up 1.4 percent at close on Friday.

Revenue fell across both Bulletproof's public cloud and private cloud businesses, however, it managed a nominal revenue increase in professional services.

Bulletproof, which is a top-tier partner of both Amazon Web Services and Microsoft Azure, admitted that reseller margin in public cloud "continues to come under pressure from our external partners".

"New managed service offerings are starting to offset these reduced margins, reflecting high value and demand for complex service management capabilities.

"In contrast our private cloud solutions rely on investments previously made by the business over time, with continuing capital requirements to maintain currency and functionality/security.

"With longer contract commitments, the private cloud business is characterised by more stable revenue and earning lines," according to a company statement.

Bulletproof's New Zealand business, which was established after acquiring Cloud House in 2016, saw half-year revenue fall from $1.5 million to $933,000 year-on-year.

Bulletproof is currently in a legal dispute with Cloud House's founders over earn-out payments of close to NZ$3.9 million (A$3.6 million).

Bulletproof also announced some recent contract wins for its professional services business, including the NSW Department of Finance, Services & Innovation and an unspecified global financial institution.

Bulletproof has been subject to a bidding war between Macquarie Telecom and AC3.

Bulletproof’s board last week unanimously recommended shareholders accept AC3's 15.2 cents-per share acquisition offer, which values Bulletproof at $24.7 million.

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