...Welcome to Cirata's H1 update, and what we're gonna start with is the essence of what Cirata does for some of the largest corporations on the planet. What we allow them to do is move massive amounts of data to support their generative AI strategies and their data analytics strategies at vast scale and complexity, orchestrating these transfers across many environments from on-premise to cloud, and do it seamlessly across locations. So when we look back at some of the highlights of the first half, and obviously with the quarterly reporting that Cirata does for investors, we make sure that we're providing transparency and regular updates, but it's a good moment to pause and look at some of the highlights. Obviously, last year was very much about the rescue of the company, and this year is really all about recovery.
So the transformation plans we put in place last year are now operationally in the business as usual. We did do a checkpoint in the first quarter around reviewing the strategy, talking directly to customers and partners, and really validating the direction of travel for the company, and that's really allowed us to accelerate on the product roadmap. I'm pleased with the progress we're making, both on the data integration business and the DevOps, with some of the new releases coming out, very much aligned with the input directly from our largest customers. In the go-to-market function, we're seeing the pipeline build improving, and sales execution improving.
Alt`hough we certainly acknowledge on some of the larger deals, there has been some deal slippage that we're seeking to address, and some of the elements of that come into play in the second half of the year. And I think probably an important narrative that's developing within the company is around creating significant operating leverage. So we've taken the cost base down from a run rate of 45 million a year to 20 million, which is a 55% reduction in the overall cost base of the company, but we're now broadly seeing similar bookings and revenue. And obviously, our focus now is all about driving growth, driving profitable growth, and seeing that operating leverage really open up to be a significant factor in the company's investment proposition.
Thank you, Stephen. Hello, everyone. I'm just gonna go through a few slides going through the financial performance of the business in the first six months of the year. Starting with revenues, we closed $3.4 million of revenues in the first six months compared to $3 million of revenues in the similar period in 2023. Revenues were driven by deferred revenues from contracts in previous periods, as well as bookings in the current period. From a bookings perspective, we closed $2.4 million of bookings against $2.8 million in the first half of last year.
The pleasing thing about the performance in bookings is that we closed 31 contracts, of which 16 were from either new contracts from new customers or growth in existing customers, so customers coming back to buy more from the business. From a cash overheads perspective, our cash overheads for the period were $11.7 million, significantly lower than the similar period last year, reflecting some of the costs rationalization that we took in the second half of last year, as well as just general management of the cost base. As Stephen has said, this has created a strong operating leverage for the business going forward. Adjusted EBITDA loss was $8.5 million versus $14.8 million in the first half of last year.
The performance, the improvement in performance, reflects the improvement in the cash overheads in the first six months. From a cash perspective, we closed the first six months with $9.1 million of cash versus $18.2 million last year. This closing cash as at 30th of June 2024 doesn't reflect the cash that we raised after the period end. Moving on to our outlook for 2024, we are maintaining our guidance as we've said from the beginning of this year. Bookings are expected to be in the range of $13 million-$15 million.
The pipeline supports this guidance, but, you know, strong execution is required for us to deliver on it. As we've said before, expected bookings would be Q4 weighted. In terms of what this means from a relative prior period performance, it would represent a sequential progression on FY 2023 of 81% growth at the low end and 108% growth at the high end. Management also maintains its aspiration to exit 2024 at cash flow breakeven. We have talked about a nonlinear progression of future cash flow with lumpy bookings from quarter to quarter, but from a trend perspective, both in the cost base and bookings, you know, this continues to be positive. All right, now moving on to current trading. I'll just briefly touch on where the company is.
The company has continued to make progress, closing nine deals so far in Q3. We will provide further information of the Q3 trading in the IMS release, expected to be released in October. Now I'll hand back over to Stephen to talk more broadly about the business.
... So we've shared with you in the first quarter and the second quarter, and now just reflecting on the half year, H1. Slippage has been a factor that we've dealt with in the business. Now what's happened is those deals that slipped from Q4 to Q1 did then close. So the good news is the pipeline remains robust. The problem we've had is actually the timing of the closures, and we've addressed a lot of those things internally to make sure that we're improving our level of predictability. And we're seeing the benefit of that on some of the smaller deals.
I'm very clear that, the year is back-end loaded, and we anticipate in the fourth quarter that a lot of the deals will be closing, where there's customer critical timelines, where they, from a business point of view, have to, address their deployments of Cirata. So I think, you know, ultimately, we are absolutely never gonna sugarcoat stuff. We'll tell you how it is, what the issues are, what the opportunities and the challenges, and I think we're making good progress. Slightly slower than I would have anticipated, but we're very focused on the next four months, and, certainly acknowledge we've got a lot to do.
And we wanna see that deal flow and the momentum in the business of the bookings, 'cause ultimately, that underpins everything we're outlining in terms of both the operating leverage, but also the fundamentals about the growth and success of the company. So I think the story of last year was all about rescuing the company and establishing the platform for growth, and this year's really been focused on recovery. You know, I'm very conscious, without the news flow and the deal flow, that we need to provide under-the-covers view of what's happening within the business, and therefore we've shared with our investor community the key performance indicators that we track internally. One of those is the pipeline. We've seen that grow with 110 opportunities as we exited the half year and went into the second half.
The pipeline mix as well, I think we're seeing a lot of momentum with our partners. We've implemented a lot of changes in terms of the sales cycle, but we are seeing validation where the three strong use cases from the customers of Cirata deployed on our data integration, which is disaster recovery, migration, and this unique capability where we have continuous movement of data and synchronization of that data for customers, it's been validated through customers actually purchasing our solution to deliver those use cases. The other element that's quite important, we've talked about, is this land and expand strategy, and with one of the largest automotive companies in the world, we're seeing that they've come back for more Cirata technology as they continue their deployment and success within their business.
We do see land and expand as a key way where we start small with a customer. You could imagine it almost like an acorn that you plant, which will grow into an oak tree. But ultimately, with land and expand, we do see customers coming back, particularly for the continuous use of data use case, multiple times to Cirata with additional purchase orders and additional investment in our technology to help their continuous movement across their enterprises. We have made a lot of progress on the product roadmap, and I think we're seeing the acceleration actually within our engineering function. I'm really pleased with the progress we're making.
We now directly look at the product roadmap, talk to customers, gain their input, and make the prioritization calls that we need to ensure that our product's ahead of the market need, and very much, very much aligned to the customer needs that we're dealing with. And we're also seeing a lot of validation with our partners, particularly IBM, Microsoft, Databricks, to drive their strategies aligned with our product roadmap as well. So I think, ultimately, we've made progress. We've got the platforms in place now for growth, and that's our focus, really, about driving towards that goal on profitable growth. So I think a really good validation point as well is in the first half. We spent quite a lot of time talking to customers and partners with a validation and review of the strategy.
And ultimately, what it told us from the marketplace is there's really strong demand around data integration and the use cases that we're addressing, as well as DevOps. And we've seen some acceleration in our DevOps business and also winning some new customers, so that's great to see in the first half. Also, what it says so, apparently to us, is that it's really important to have a footprint in North America, and international. Many of our customers are the biggest brand names on the planet, and they're geographically spread. So we think that's important. So two products, DevOps and data integration. Key geographies, North America, international, and obviously DevOps, we're selling worldwide. And continue to focus on this eight to 12 quarters tactical plan supporting the growth and making sure our roadmap is aligned to that.
So we do have a longer term strategic focus, which we're developing, and that will be something that we talk much more about to investors as we progress through the end of this year and into 2025. So what are the conclusions? What are the takeaways? As we exit H1, I think, you know, the foundation blocks are very compelling product market fit, both on the data integration side of the house and also the DevOps side. We're very strongly validated against customer use cases and validated through the strategy work where we talk directly with partners and customers. I think the product alignment now is much stronger, and a lot of the roadmap development is actually gained directly from primary work happening directly with conversations with our customers.
That's a field of work where Paul Scott-Murphy, our Chief Technology Officer, and Stephen Hilditch, who runs product management, really are investing their time with customers, making sure the roadmap is not only looking after their needs today, but their needs in the future. We've also spent time validating with our partners. Some of our biggest partners include companies like IBM, Microsoft, AWS, Databricks, some of, again, the greatest companies on the planet. So what all that rolls down to is we are seeing some bookings momentum, the pipeline is building, and what we need to do, and very focused on over the next four months, is drive the growth on the booking side of the business, to deliver what we've set out, and I think we will see significant operating leverage from the company.
We've taken our cost base down by 55%, from GBP 45 million a year to GBP 20 million a year as we exit the year, and we are really focused on driving growth and ultimately setting the company's path to successful, profitable growth.
I'm joined today by Stephen Kelly, the Chief Executive Officer of Cirata. Stephen, it's great to have you with us.
Good to be here.
Now, following your recent announcement of your interim results, you say that deal slippage is masking the very real improvements that you're seeing in the business. Can you address directly why we continue to see deal slippage, and what are the mitigations?
Yeah, I think we wanna be very transparent with our investors, so we're calling out some of the good stuff that's happening in the company, but also some of the challenges we're facing, and one of those we've highlighted has been deal slippage. We're making a lot of progression there around much better sales execution, pipeline reviews, much better understanding of the procurement cycle customers are going to, so I think we're making progress here, and we're seeing the impact of that on some of the smaller deals, which are closing with more precision, but on some of the headline larger deals, that hasn't happened. They've slipped from Q1 to Q2 and Q2 to Q3, so we're very focused in the second half. I guess, you know, what we'd say is it's showtime. We've got to deliver.
Now, you flagged that the operating leverage of the business is vastly improved. Can you explain what you mean by that?
Operating leverage is a phrase that's bandied around, but essentially, what it is all about is driving the top line, driving growth, but not necessarily increasing the cost base. What we've seen for Cirata is over the last 18 months, we've reduced the cost base from $45 million to $20 million annually, and that's a 55% reduction in the cost base, but we're seeing broadly the same bookings and revenue. What we wanna be seeing is the revenue growth expanding, but we're already demonstrating early signs of operating leverage, and that's a key focus of the management team.
What allows you to claim that you have product market fit, given the low level of booking?
Yeah, good question. I think what we've done is sort of validate that through objective data directly with the customers and partners. So in the first half, we did a review of the strategy. We talked directly to major customers and our partners, and we found that particularly around three use cases on data integration, that's disaster recovery, that's migration, and that's the continuous movement of data from some of the big automotive companies, we found a very strong product market fit and validation of that. And now we're in this next phase of evolution, where we're actually building the roadmap very much symbiotic with customer input, not just for today, but meet their needs of tomorrow.
Now, Stephen, just on your cost-cutting programs, they seem a little at odds with building a growth business. What is the risk that you cut too far, and how do you strike that balance between reducing overhead and ensuring capital is allocated to the growth opportunity?
Yeah, great question. I think what we sought to do in phase one of the rescue and the recovery was actually to reduce the cost base to drive the company towards breakeven. We've done that. We've taken the cost base down from £45 million a year down to £20 million. That's a reduction of 55%, which really speaks well to the operating leverage that we're starting to deliver. But now we're very focused on the growth, and I think we've got enough capacity in the investment we've made in engineering, in the roadmap, and in the go-to-market functions. And there's been a night and day change in terms of the quality of the governance of the back office across the company.
So I think all areas and all functions have sufficient investment today, and we've been very thoughtful about how we've made those choices.
Now, you flagged the internal work that your team have done to review your strategy. What would you say are the most important conclusions from your review, and were there any surprises?
It allowed us to take that opportunity to have a fresh look at the strategy, validate it directly with customer feedback and input and partners. And the takeaways really, kind of number one is both product lines of data integration and DevOps are robust, have got strong customer support, and a good product market fit. The other thing that's important is geographic expansion in terms of growth and to have a footprint in North America and international for data integration, and obviously kind of a global coverage model in DevOps as well, and that's what we're focused on, and now we've got the model down where we're investing appropriately in the business. It's all about focusing on growth and the execution of that strategy.
Stephen, it's clear you're maintaining confidence in the full year 2024 outlook, and the year is going to be back-end weighted. Do you think this will be a continuing feature of the business? Is Q4 inherently seasonal in the calendar?
I think that invariably there is some level of seasonality for most software companies, so Q4 is a very important quarter. What we're seeking to do, though, is drive the improvements right across the board in the go-to-market function. That's from sort of pipeline build, lead generation, right through to how we're dealing in terms of sales execution and managing sales cycles, so we're doing a lot more reviews, a lot more understanding the procurement cycles for customers to get a greater level of predictability, and therefore address the issue we've had historically around slippage that we've been very transparent calling out.
Now, can you talk to us a little more about how the product roadmap and the GTM are aligning, and why that's so important?
Yeah, I think we've got a really fantastic engineering. We've got a differentiated product, particularly on data Integration, but also on DevOps, where the Consensus Engine allows large development organizations to be able to synchronize and make sure they absolutely maximize the effectiveness of their development function. And we've really taken a lot of time now to connect those roadmaps with customers, with the market, directly, with primary research and discussions, to make sure they're very clearly aligned. And I think that gives us confidence that the roadmap gives us a differentiated product today, but also we're stargazing into the future with customers to see what their requirements are tomorrow, to make sure they're accommodated within our roadmap and our investments in engineering.
Now, we've seen you've returned to the market for capital. How much runway does the recent injection of cash give you, and how will you be allocating those funds?
Yeah, we recently did a fundraise that raised $7.2 million. You may remember last year in the rescue round, we raised gross $30 million, but after all the fees, it was effectively $22 million. So, the current management's gone out to the market, and I'm really delighted with the support from the investors, that we've raised a total of $29 million. And what that's allowed us to do is make sure there's sufficient working capital to support us through break-even and beyond, and our plans as we look out into the future, are about profitable growth, so that's really important for us as a marker.
So Stephen, are there parts of the business that despite the cost-cutting mode, you are still in need of investing in? And are you cutting or reallocating spend?
Yeah, we've spent a bit of time over the last nine months in this year, dynamically looking at the investment picture for the company and making sure we've absolutely got everything covered to build the capability for growth and the platform for growth. I think as we go forward, we will invest incrementally in sales to really drive that growth, and that's primarily our focus now.
So finally, the first half is closed. We're now moving into the second half of the year. What should we expect for the future few quarters?
Yeah, I think, again, I'm very straightforward in terms of saying what we're happy with and what we've got to do better on. For the future, we're very focused on growth and seeing profitable growth, FY 2025 on FY 2024, and actually in future years as well. We've already started the FY 2025 planning process internally with the management team, and we're running that through the next couple of months. And the trajectory looks about growth, and I think, you know, that is, from what we see in the marketplace, an opportunity that presents itself to the company, so it's down to this management team to execute on that plan.
Stephen, great to speak to you as always. Thank you.
Great to speak to you, Rosie.