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IBM locks-in expansion of Nexion services as ASX newcomer beats maiden full year targets

Nexion Group has delivered its maiden full year numbers for 2022, following an action-packed first full year of trade as a listed concern for the Aussie IT service provider.

After listing in February last year Nexion Group (ASX: NNG) has shown why the owner and operator of the integrated cloud infrastructure – One Cloud – is already a serious player in the competitive whole-of-enterprise IT sector.

The company exceeded its prospectus targets for organic growth and full year revenue including acquisitions by significant margins.

Year of growth

Underlying revenue growth in the original business was 79% and total revenue growth including completed acquisitions grew by 310%.

Cash consumed was steady year-on-year at $3.3m vs. $3.2m in FY21 to deliver significantly more revenue as the company moved closer to cash-positive operations.

Recent wins and further efficiency gains look set to deliver positive results early in FY23.

At the end of July the global cloud service provider turned a lot of heads with a huge June quarter, improving margins and slashing operating costs.

Underlying organic growth of the original networks business was 76% YoY over the last quarter. With the addition of the Blue Sky Telecom acquisition, underlying organic growth of NNG’s original networks business was 76% YoY and up over 200% for the year.

With completion of an agreement to acquire two businesses in New Zealand, the group has a retrospective pro-forma FY22 revenue of $18.4 million.

Nexion remains on song to deliver positive EBITDA in this financial year.

IBM asks for extension of NNG range of services

The piece de resistance for a business offering full spectrum computer and data storage equipment as a service which  integrates with Public Cloud services, is the decision by IBM  (NYSE: IBM) to select NEXION to provide a multimillion dollar, multiyear agreement for cloud services in Western Australia.

Then, in August a clearly pleased IBM moved quickly to extend the agreement to include enhanced services.

The broad inclusion of a scope of special services is a massive stamp of approval for Nexion’s capability to provide hybrid cloud plus managed technology services for the world’s biggest and best enterprises.

The enhanced IBM contract will see Nexion add Data Centre Services, Resilience Services, Client Centre and On-Site Support Services, Digital Workplace Services, Identity and Access Management Services and Storage as a Service to the contract scope.

The deal alone should add $1.21m of revenue over the coming 12 months and starts today,  1st September 2022.

Nexion businesses

Nexion Networks owns and operates Hybrid Cloud infrastructure and provides associated services while Nexion W1 owns and operates a 3 megawatt capacity data centre in Perth, Western Australia.

The company offers private cloud infrastructure integrated with Public Cloud services to form the Nexion Hybrid Cloud solution it calls OneCloud.

Nexion also hosts a OneCloud Node in its own data centre in Perth and third-party data centres in other cities and sells capacity to customers on term contracts up to 36 months.

The company also provides SD-WAN to connect customer premises and equipment to its Hybrid Cloud.

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