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Positive Technologies is a Russian developer of cybersecurity software: systems for attack detection, application protection and vulnerability analysis. The company went public in an unusual way — through a direct listing, without placing new shares. Its shares trade on the Moscow Exchange under the ticker POSI.
The company sells licences for its products and subscriptions to their updates. The software business model works differently from a manufacturing one: development is expensive once, while each further copy sold costs almost nothing. That is why profit grows faster than revenue — but only after revenue has passed the cost of development.
This explains a peculiarity of the company's reporting: it bears the cost of building the product all year round, while a significant part of sales falls at the end of the year, when customers close their budgets. Interim quarters therefore often look loss-making, and this is a feature of the calendar, not of the business.
The main buyers are large companies and government organisations, for which protecting information systems has become a mandatory requirement.
Attack detection and prevention systems, web application protection, vulnerability management.
Incident investigation, security assessment, training of specialists.
Business lines that do not yet bring in notable revenue but account for part of development spending.
Strengths and weaknesses describe the business itself. Opportunities and threats describe what may happen around it.
The company develops and sells cybersecurity software: attack detection systems, web application protection, tools for finding vulnerabilities. In addition, it provides incident investigation and training services.
Because of the seasonality of sales: customers close their budgets at the end of the year, and the bulk of revenue falls in the fourth quarter, whereas development costs are spread evenly. A loss in the middle of the year is a feature of the sales calendar, not a sign that the business is deteriorating.
It is a way of going public without issuing new shares and without raising money: the shares already held by existing shareholders are admitted to trading. The company receives no proceeds from the placement.