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LGMS Q2 2025 Deep Dive: Navigating Headwinds While Gearing Up for Growth
In today’s fast-paced digital world, cybersecurity is no longer a luxury but a necessity. One of the key players in this space, LGMS Berhad, has just released its financial results for the second quarter ended June 30, 2025. The report presents a mixed picture: while the company faces some short-term challenges reflected in its year-on-year performance, it is also making significant strategic moves, including a proposed transfer to the Main Market of Bursa Securities. Let’s unpack the numbers and see what they tell us about the company’s current health and future trajectory.
A key highlight from the report is the company’s forward-looking strategy. Despite a dip in quarterly profit, LGMS is expanding its workforce and has formally applied to move from the ACE Market to the Main Market, signalling strong confidence in its long-term growth prospects.
Core Data Highlights: A Tale of Two Comparisons
When we look at the financials, the story changes depending on our point of comparison. The year-on-year figures show a slowdown, but the quarter-on-quarter results suggest a positive momentum shift.
Year-on-Year Performance (Q2 2025 vs Q2 2024)
Compared to the same quarter last year, LGMS saw a decrease in both revenue and profit. The primary reason cited was a reduction in higher-value projects within its cyber risk prevention segment. Additionally, strategic investments in expanding the workforce led to higher employee benefits expenses, which impacted the bottom line.
Q2 2025 (Current)
Revenue: RM 10.02 million
Profit Before Tax: RM 2.78 million
Profit After Tax: RM 2.03 million
Earnings Per Share: 0.44 sen
Q2 2024 (Comparative)
Revenue: RM 11.53 million
Profit Before Tax: RM 4.82 million
Profit After Tax: RM 3.65 million
Earnings Per Share: 0.80 sen
Quarter-on-Quarter Improvement (Q2 2025 vs Q1 2025)
However, when we compare the current quarter to the immediate preceding one (Q1 2025), the picture is more optimistic. Revenue grew from RM9.64 million to RM10.02 million, driven by stronger performance in the cyber risk management and compliance segment. This uptick in revenue also led to a corresponding increase in profit before tax, suggesting a potential turnaround.
Segment Spotlight: Where the Growth Is
A breakdown of the revenue streams provides crucial insights. While the core “Cyber Risk Prevention” segment saw a significant drop compared to last year, the “Cyber Risk Management and Compliance” segment showed impressive growth of over 50%. This diversification helps to cushion the impact of fluctuations in any single business line.
| Business Segment | Q2 2025 Revenue (RM’000) | Q2 2024 Revenue (RM’000) |
|---|---|---|
| Cyber Risk Prevention | 5,826 | 8,162 |
| Cyber Risk Management and Compliance | 3,275 | 2,170 |
| Cyber Threat and Incident Response | 923 | 1,199 |
A Fortress Balance Sheet
Despite the profit dip, LGMS maintains an exceptionally healthy financial position. With cash and cash equivalents standing at a robust RM68.71 million and total borrowings of only RM0.68 million, the company has a very strong foundation. This financial stability allows it to invest in growth initiatives and navigate market cycles without financial strain. The net assets per share also increased to 21.06 sen from 20.69 sen at the end of 2024.
Risk and Prospect Analysis
Riding the Wave of Digitalisation
The outlook for the cybersecurity industry remains incredibly bright. The ASEAN market is projected to grow at a compound annual growth rate (CAGR) of 17.24% between 2025 and 2030. In Malaysia, new regulations like the Cyber Security Act 2024 and strategic roadmaps like the MyDIGITAL Blueprint are creating a mandatory demand for advanced cybersecurity services. LGMS, with its established track record and expertise, is perfectly positioned to capture these opportunities.
Strategic Moves for Future Gains
The company is not standing still. It is actively investing in its future through:
- Workforce Expansion: The increase in employee costs is a direct result of hiring more talent to handle future growth.
- Innovation: LGMS is evolving its business model for its automated cybersecurity tool, StarSentry, to offer greater value to customers.
- Main Market Transfer: The proposed move to the Main Market is a significant milestone. It would enhance the company’s prestige, attract a wider pool of investors, and reflect its maturity and scale.
Summary and
In summary, LGMS Berhad’s Q2 2025 results reflect a period of strategic transition. While the year-on-year numbers show a decline due to project timing and investment in talent, the company’s quarter-on-quarter improvement, rock-solid balance sheet, and significant corporate developments paint a promising long-term picture. The strong industry tailwinds and proactive government policies provide a supportive environment for growth.
For those following the company, here are some key points to monitor in the coming quarters:
- Revenue Momentum: Watch for a recovery in the Cyber Risk Prevention segment and continued strength in the Cyber Risk Management and Compliance division.
- Profitability Margins: Observe how the company manages its expanded cost base and whether the investment in headcount translates into higher revenue and profit.
- Main Market Transfer Progress: Successful completion of the transfer could serve as a major catalyst and validation of the company’s growth story.
- Capital Utilisation: With a large cash pile, any strategic deployment of capital for expansion or innovation will be a key indicator of future direction.
Final Thoughts
From my perspective, while the headline profit decline might catch the eye, the underlying story is one of strategic investment and positioning. The strong balance sheet provides a safety net, while the move to the Main Market and investments in talent are clear signals of ambition. The challenge now is to execute and turn these strategic initiatives into sustained, profitable growth.
What are your thoughts on LGMS’s performance this quarter? Do you believe their investment in expanding the workforce is a wise move for the long term? Share your views in the comments below!
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