IKE this morning has provided a Q1 FY23 update. IKE CEO Glenn Milnes commented, "The past quarter was another outstanding period of growth at IKE. It included the material expansion of various existing customers and saw several new and important tier-1 enterprise groups onboarded, including one the five largest engineering companies serving the electric utility market across the U.S. The first phase of this contract includes supporting a 10-year network hardening program for a electric utility in the South-West. Market development acivity also featured training 325 engineers on IKE products and workflows at a major investor-owned utility in the southern U.S. 

Operating leverage is in place via the scalability of our software and our disciplined approach to operating expenses. Management and the Board remain cognisant of the importance to maintain a fortress balance sheet position, and driving this operational leverage to get to positive cash flow is front of mind.

The outlook remains robust. Following 71% revenue growth in FY22, we expect FY23 to be another significant period of growth. This is driven by the estimate that $13-15m of our signed contract backlog will be delivered and recognised as revenue in the next three quarters of FY23 (noting that the ultimate timing of these contracts is subject to the execution speed of our customers). In addition, our sales opportunity funnel is strong and we anticipate a healthy run rate of new contracts will also close and be recognised in the FY23 period.”  

Highlights for the quarter:

• Revenue in Q1 FY23 of ~$6.8m (+162% vs pcp). Within this, recurring Subscription and reoccurring Transaction revenue was ~$5.7.m (+167% vs pcp).  
• Gross margin in Q1 FY23 of ~$3.9m (+116% vs pcp) representing a Q1 FY23 gross margin percentage of ~57%.
• Signed contracts in Q1 FY23 of ~$8m (+31% vs pcp). The signed contract backlog has continued to grow and it is estimated that $13-15m of this backlog will be delivered and recognized as revenue in the FY23 period. 
• Cash and receivables as at 30 June 2022 was ~$27.7m, comprised of $23.3m cash and $4.4m receivables, with no debt. This position is just ~$1.2m lower than six months prior (at 31 December 2021) evidencing the operating leverage in the business.  

IKE has signed a $600,000 contract with an existing customer to deploy fiber in California, USA. This customer is utilizing IKE’s platform to speed up the assessment and deployment of a fibre network.

IKE CEO Glenn Milnes commented:

“We have had a strong start to CY2022, closing more than $6m in contracts in the first seven weeks of the year, with revenue growth expected to reflect this contract momentum.”

“IKE is continuing to increase its operating leverage via these larger contract wins from existing clients - who are utilizing the IKE platform more broadly over time, and with these contracts being delivered by the existing IKE team. Importantly, we believe there is further opportunity to expand inside of this existing customer base for years to come.”

“The additional contracts above follow other wins announced in January including extending a U.S. communications customer contract to $4m and closing a tier-1 electric utility customer contract of $0.9m.”

“Our balance sheet remains very strong with cash and receivables of ~$30m at the end of January, up from ~$29m the month prior. This balance consists of ~$26m cash and ~$4m receivables. Market tailwinds provide us with confidence around the potential for continued strong growth.” 

IKE has announced this morning a $0.9m deal with a new tier-1 North American electric utility customer. This follows a separate announcement earlier in the week of extending a U.S. communications customer contract to >$4m.

• IKE has received an approximately $0.9m contract from a new tier-1 North American electric utility customer.
• The approximately $0.9m revenue will be fully recognized over the coming 12 months.
• At this initial level of users and platform usage, the expected ongoing software subscription revenue from this customer will be approximately $200k per annum.
• This customer is utilizing the IKE platform to speed the assessment and engineering of distribution pole assets for network hardening purposes. 

IKE CEO Glenn Milnes commented, “We are pleased to add aother tier-1 electric utility to our customer base and to be supporting their important multi-year grid assessment & hardening work. We have performed well over the past few months and have got off to a very fast sales start in 2022. With continuing market tail winds we look forward to strong ongoing growth.”

IKE will be releasing its Q3 performance update and commentary 1 February 2022. 

IKE signs material customer contract with U.S. national engineering services business

Crown Castle International begins roll out of the IKE Platform

ikeGPS Group Limited (NZX:IKE/ASX:IKE) (“IKE” or “the Company”), the company setting the standard for collecting, managing and analysing pole and overhead asset information for North American electric utilities, communications companies and their engineering service providers, is pleased to announce that it has won a material long-term contract with a national engineering services business operating across the U.S. communications and utilities market. Their use of the IKE Platform will translate to approximately $0.7m revenue per annum.

IKE is also pleased to announce Crown Castle International Inc. (CCI), the largest provider of communications infrastructure for cell towers, small cells, and fiber in the U.S., has standardized on the IKE Platform for pole-related 5G and fiber deployment processes. IKE originally described CCI’s profile to the NZX and ASX in July 2020 and this marks the first time that it has been able to name them as a significant customer. Over the past quarter IKE has deployed its systems into an initial eight CCI regions.

IKE CEO Glenn Milnes, commented: “We are pleased to be closely aligned with CCI. Our objective is to get CCI networks built and to market faster, be it fiber or 5G construction, where the IKE platform has proven to more than double their pre-construction speeds for network deployments.”

“The majority of the revenue opportunity for IKE relating to CCI standardization however comes from their 200+ engineering service providers, as opposed to CCI itself.”

CCI’s 2020 Director of National Construction Small Cell, Robbie Heaps, said: “Delivering on the Crown Castle promise calls for a modern approach to how small cell and fiber data is collected in the field and then processed in our back office. IKE brings the platform and a creative and resourceful team to reduce permitting acceptance times. We’re leaning on them to improve our speed to market.”

Commenting on the signing of the material and long-term engineering service provider (ESP) contract, Glenn Milnes continued: “We are also pleased to have closed this large and long-term contract with an important national ESP. Like many ESP’s, this group perform network engineering for multiple communications businesses and in this case for AT&T Inc., Verizon Inc., as well as CCI. The expected revenue from this ESP contract is $0.7m per annum based on run rate IKE Platform usage.”