Ikegps Group Ltd · NZX:IKE
Ikegps — Q3 FY24 Earnings Presentation
29 slides from Ikegps's earnings presentation, February 2024
Slide 1: IKE Performance Update for the Q3 FY24 Period
IKE Performance Update for the Q3 FY24 Period to 31 December 2023 We’re IKE, the Pole OS Company Glenn Milnes, CEO glenn.milnes@ikegps.com February 2024 CONFIDENTIAL
Slide 2: Important Notice
Important Notice Information in this Presentation: • Is for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in ikeGPS Group Limited (IKE); • Should be read in conjunction with, and is subject to, IKE’s FY23 financial re
Slide 3: Agenda
Agenda Q3 FY24 performance IKE PoleForeman product release, and broader sales update Addressable market and IKE’s value proposition Q&A ikeGPS 3
Slide 4: Revenue 1H FY24 of ~$15.3m (-34% pcp)
Revenue 1H FY24 of ~$15.3m (-34% pcp) Takeaways: • Four-year revenue CAGR of 35% • Recurring subscription and reoccurring transaction revenues (shown by the green and blue segments in this chart) dominate IKE’s revenue mix, at 85% YTD. • An expectation for healthy contract growth in the FY25 period
Slide 5: Subscription revenue growth has continued to be strong (+24% pcp)
Subscription revenue growth has continued to be strong (+24% pcp) Takeaways: • Significant growth in underlying subscription revenue. • Four-year subscription revenue CAGR of 32%. • During FY25, this is expected to increase materially due to sales of IKE’s next-generation structural analysis product
Slide 6: But transaction revenue was down vs pcp (-65% pcp)
But transaction revenue was down vs pcp (-65% pcp) Takeaways: • Four-year transaction revenue CAGR of 45%, but 65% lower that pcp YTD FY24 vs pcp due to FY23 seeing outsize customer growth and activity. • Based on guidance from long-term customers IKE expects transaction volumes and associated reven
Slide 7: At-a-Glance
At-a-Glance Q3 FY24 performance headlines Headlines: • YTD revenue of ~NZ$15.3m (-34% pcp). • Subscription revenue of NZ$7.9m (+24% vs pcp). • Transaction revenue of NZ$5.1m (-65% vs pcp). • YTD gross margin approximately of ~NZ$8.8m (-28% vs pcp), with a gross margin percentage of ~58% (up from pcp
Slide 8: Q3 FY24 Key Metrics
03 FY24 Key Metrics PCP YTD FY24 | (YTD FY23) | % Change Total Revenue NZS$15.3m | NZ$23.3m -34% Platform Transactions # of Billable Transactions 197k 376k -48% Platform Transaction Revenue NZS5.1m | NZ$14.3m -65% Gross Margin NZS0.7m | NZS$5.3m -87% Gross Margin % 14% 37% Platform Subscriptions Tot
Slide 9: Q3 Update and Outlook
© ike” =~ 03 Update and Outlook
Slide 10: Q3 Update and Outlook
Q3 Update and Outlook Next gen structural analysis product released. Early adoption from tier-1 infrastructure groups. Subscription sales highlights for our IKE PoleForeman included: - ~NZ$3.7m five-year subscription contract with a Fortune 150 Company and one of the ten largest Investor-Owned-Utili
Slide 11: Q3 Update and Outlook continued
Q3 Update and Outlook continued………. Uptick in transaction contract wins vs 1H. Run rate of one new enterprise customer per week in North America. Transaction sales highlights included: - An agreement with a U.S. electric utility expected to generate ~NZ$1.3m transaction revenue over the next three y
Slide 12: What IKE does, and the market opportunity being addressed
What IKE does, and the market opportunity being addressed Product and Market re-cap
Slide 13: IKE has a Suite of Distribution Network Software Products
IKE has a Suite of Distribution Network Software Products Built to address distribution network problems in North America Business model upshot • A recurring Subscription to access any IKE Solution • Additive, reoccurring Fees based on usage (license seats or transactions) • Optional value-added pro
Slide 14: More than 3,000 electric utilities and 200M distribution assets across the U.S.
Communications Market Macro More than 3,000 electric utilities and 200M distribution assets across the U.S. Investing in decades-long grid resiliency and grid capacity programs Facing common challenges • Grid resiliency requirements • Regulatory and Engineering code compliance • Grid capacity requir
Slide 15: Where IKE sells: U.S. Market-Map of Investor-Owned Utilities
Where IKE sells: U.S. Market-Map of Investor-Owned Utilities (multi-$B companies) IKE is the Standard within 7 of the 10 largest today, with a huge expansion opportunity…… ikeGPS 15
Slide 16: Where IKE sells: U.S. Market-Map of >2,800 Municipalities and Co-Operatives
Where IKE sells: U.S. Market-Map of >2,800 Municipalities and Co-Operatives All of which represent sales opportunities for all IKE products Takeaways • Market timing is everything • IKE is in the right place, and the right time, with the right technology, team and execution capability • Overlay on t
Slide 17: 25-year Macro-Market Tail Wind for Grid Resiliency & Expansion
25-year Macro-Market Tail Wind for Grid Resiliency & Expansion ($B’s) An Electric Utility Industry, Spending 100’s of Billions, in Need for Productivity Solutions, such as IKE $NZD in B U.S. AND CANADIAN ELECTRIC DISTRIBUTION CAPITAL EXPENDITURES ACTUAL Canadian Muni Co-ops US IOU FORECASTED $110.1
Slide 18: 7 of the 10 largest Investor-Owned Utilities have standardized on IKE products
7 of the 10 largest Investor-Owned Utilities have standardized on IKE products IKE Lands-then-Expands Communications Takeaways • 7 of the 10 largest Investor-Owned Utilities (“IOUs”) in North America, all multi-billion dollar businesses • >400 customers in North America, Electric Utilities with 60 l
Slide 19: IKE solutions make fiber and 5G network deployments faster
IKE solutions make fiber and 5G network deployments faster • >$300B expected investment into fiber network development in the U.S over next 5+ years • >$50B expected investment into 5G network development in the U.S. over the next 5+ years • An additional >$60B expected investment into rural broadba
Slide 20: Fiber and 5G Investment Super-Cycle in North America Still In Its Early Stages
Fiber and 5G Investment Super-Cycle in North America Still In Its Early Stages PROJECTED INVESTMENTS INTO 5G & FIBER OPTIC INFRASTRUCTURE $NZD $72B $43B $39B 2010 2018 2025 ikeGPS 20 Source: Bell Potter Initiation of Coverage Report, GSMA, American Tower Note: Labeled Capex Figures reflect Houlihan
Slide 21: Some of the largest U.S. Communication groups have Standardized on IKE
Some of the largest U.S. Communication groups have Standardized on IKE And a growing footprint of tier-2 fiber businesses Communications Takeaways • Several of the largest comms group in North America: AT&T ($107B), Crown Castle ($39B), Bell Canada ($47B) Electric Utilities • A growing footprint of
Slide 22: Overall.. an Addressable Market Opportunity That is Expected to Grow Strongly
Overall.. an Addressable Market Opportunity That is Expected to Grow Strongly Utilities 5G and Fibre $NZD $NZD Estimated 5G Small Cell Fibre Connections $113 Cost of Antenna New Build per Pole 25M Poles Used for Other Services2 Estimated 40M Poles $50 Cost of Needed for Audit per Audit per Pole annu
Slide 23: Extensive Market Tailwinds Over the Coming Two Decades
Extensive Market Tailwinds Over the Coming Two Decades Requirement for harder and higher >3,200 capacity distribution power networks Electric Utilities in North America with long-term, recurring across all of North America distribution network hardening, joint use, and capacity needs for electrical
Slide 24: IKE Goes to Market Directly
IKE Goes to Market Directly SVP of Sales With a deepened team of segment experts Solutions Sr. Director of VP of Utilities Engineering Sr. Account Sr. GIS Lead Communications Manager Manager Manager Generation Sales Sr. Director of Sales Sales Director, Utility Inside Sales Communications Operations
Slide 25: A Map-View of Usage, and how IKE customers deploy our software
A Map-View of Usage, and how IKE customers deploy our software Crown Castle in Florida ikeGPS 25
Slide 26: A map-view of Usage, and how IKE customers deploy our software
A map-view of Usage, and how IKE customers deploy our software AT&T in 7 example States ikeGPS 26
Slide 27: Multiple Avenues Supporting Future Growth Potential
Multiple Avenues Supporting Future Growth Potential Sales Team Cross Sell & Platform for International 1 Expansion / 2 Upsell 3 Inorganic Growth 4 Expansion New Logos 4 3 2 1 $43mm Sales Team Revenue Expansion / New Cross Sell & Upsell into Inorganic International Revenue “Today” Customers Existing
Slide 28: Thanks
Thanks Manaakitanga: We Rise By Lifting Others ikeGPS 28
Slide 29: Q&A We're IKE, The PoleOS Company
Q&A We’re IKE, The PoleOS Company IKE seeks to be the standard for collecting, analyzing and managing pole and outside plant (“OSP”) information for electric utilities, communications companies, and their engineering service providers The IKE platform allows its customers to increase speed, improve