Ikegps Group Ltd · NZX:IKE
Ikegps — H1 FY2024 Earnings Presentation
40 slides from Ikegps's earnings presentation, October 2023
Slide 1: IKE Performance Update for the 1H FY24 Period to 30 September 2023
IKE Performance Update for the 1H FY24 Period to 30 September 2023 We’re IKE, the Pole OS™ Company Glenn Milnes, CEO glenn.milnes@ikegps.com October 2023 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 1H FY24 performance Addressable market, and IKE’s value proposition Q&A ikeGPS 3
Slide 4: At-a-Glance: FY23 performance headlines
At-a-Glance FY23 performance headlines ~$30.8M ~$16.4M FY23 Revenue FY23 Gross Margin, 66% Growth vs pcp ~93% ~53% FY23 Gross Margin %. FY23 Revenue Growth vs pcp Opportunity for Growth via Automation Tech ~89% ~$23.2M FY23 Recurring & Reoccurring Revenue Cash & Receivables on the Balance Sheet ~380
Slide 5: Revenue 1H FY24 of ~$10.5m (-32% pcp)
Revenue 1H FY24 of ~$10.5m (-32% pcp) Takeaways: • 1H FY24 was a mixed period at IKE. • Customer wins and growth in recurring subscription revenue were strong, positioning the business well for the long-term. • However, transaction revenue fell for the first time. This slow-down was well signaled to
Slide 6: 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. • This is expected to increase materially with IKE’s next generation PoleForeman being released in FY24, that is forecast to be adopted by the existing footprint of t
Slide 7: But transaction revenue was weaker, temporarily (-60% pcp)
But transaction revenue was weaker, temporarily (-60% pcp) Takeaways: • Transaction revenue fell for the first time. • This slow-down was well signaled to the market, with several major IKE customers in the U.S. communications segment having network projects slowed, mostly with unrelated regulatory
Slide 8: 1H FY24 Key Metrics
1H FY24 Key Metrics PCP 1H FY24 % Change (1H FY23) Total Revenue $10.5m $15.4m -32% Platform Transactions # of billable trans actions 142k 259k -45% Platform trans action revenue $3.7m $9.4m -60% Gros s Margin $0.7m $3.6m -80% Gros s Margin % 19% 38% Platform Subscriptions Platform s ubs cription re
Slide 9: What IKE does, and the market opportunity being addressed
What IKE does, and the market opportunity being addressed Product and Market re-cap
Slide 10: More than 3,000 electric utilities and 200M distribution assets across the U.S.
Communications Market Macro More than 3,000 electric utilities and 200M distribution assets across the U.S. Investing in decades-long grid resiliency and grid capacity programs Facing common challenges • Grid resiliency requirements • Regulatory and Engineering code compliance • Grid capacity requir
Slide 11: Where IKE sells: U.S. Market-Map of Investor-Owned Utilities
Where IKE sells: U.S. Market-Map of Investor-Owned Utilities (multi-$B companies) IKE is the Standard within 6 of the 10 largest today, but with a huge expansion opportunity…… ikeGPS 11
Slide 12: 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 13: 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 3.5% CA
Slide 14: IKE has a Suite of Distribution Network Software Products
IKE has a Suite of Distribution Network Software Products Business model upshot • A recurring Subscription to access any IKE Solution • Additive, reoccurring Fees based on usage (license seats or transactions) • Optional value-added products , such as IKE Pole loading analysis Bulk data processing f
Slide 15: 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 Communications Sr. GIS Lead Manager Manager Manager Generation Sales Sr. Director of Sales Sales Director, Utility Inside Sales Communications Operations
Slide 16: A Sales Motion that Starts with Strategy & Playbooks
A Sales Motion that Starts with Strategy & Playbooks Go-to-Market Strategy Sales Playbooks Market Opportunity Company Overview & Sales Roles Addressable Market Product & Pricing NA Electric Distribution Utility Spend (Forecast) Value Propositions Industry Drivers and Macro-Market Trends Pain reliver
Slide 17: A Map-View of Usage: Crown Castle in Florida
A Map-View of Usage, and how IKE customers deploy our software Crown Castle in Florida ikeGPS 17
Slide 18: A map-view of Usage: AT&T in 7 example States
A map-view of Usage, and how IKE customers deploy our software AT&T in 7 example States ikeGPS 18
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 p.a. Avg . Capex owth in 45% Gr $72B $43B $39B 2010 2018 2025 ikeGPS 20 Source: Bell Potter Initiation of Coverage Report, GSMA, American Tower Note: Labeled
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 fast-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 fast-growing foo
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: Market Tailwinds Summary
Market Tailwinds Summary 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 distribution 7+ year macro-mar
Slide 24: Sticky Infrastructure Customers Making Long-Term Work-Practice Decisions
Sticky Infrastructure Customers Making Long-Term Work-Practice Decisions IKE Lands-then-Expands Communications Takeaways • 6 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 logos a
Slide 25: 1H FY24 Business Development Highlights
1H FY24 Business Development Highlights The six-month period to 30 September 2023 Revenue: 1H update and 2H outlook New products in-market Important customer wins Talent and team development
Slide 26: 1H, Revenue Update and 2H Outlook
1H, Revenue Update and 2H Outlook - As signaled, revenue in 1H FY24 was below pcp due to timing delays of engineering programs across three of IKE’s largest national infrastructure customers. Specifically, this resulted in: - Ongoing growth in recurring subscription revenue, but - Lower reoccurring
Slide 27: 1H, Important Customer Win Examples
1H, Important Customer Win Examples Win run-rate of approximately one new U.S. enterprise customer per week. Tier-1 Comms customer win Tier-1 Investor-Owned Utility win Tier-1 Engineering customer win • National fiber business. • One the of the 10 largest IoU’s in North • One of the largest national
Slide 28: 1H, Product Innovation Delivery
IKE Office Pro IKE Structural IKE Insight IKE Analyze 1H, Product Innovation Delivery Expected to increase recurring subscription revenue substantially from the legacy PoleForeman customer footprint Launched this quarter, and designed with a customer council including the Standards Group leaders wit
Slide 29: 1H Product Innovation Delivery: IKE Insight
1H Product Innovation Delivery Takeaway: Faster Network Viability Assessment and More Profitable Deployment. Via automated analysis of bulk data for joint-use and overhead network deployment, at whole-of-network scale. Integrates with existing applications, data, and systems, API & Multiple File Typ
Slide 30: Example Analysis for Network Viability Assessment
Example Analysis for Network Viability Assessment At whole of network scale - IKE Insight determines pole categories relative to make-ready requirements (category-logic can be set by the customer through the Insight rules application) - Category 1: (0 or 1) wire detected in the bottom 80% of pole -
Slide 31: Example Analysis for Network Viability Assessment
Example Analysis for Network Viability Assessment At whole of network scale - IKE Insight determines pole categories relative to make-ready requirements (category-logic can be set by the customer through the Insight rules application) - Category 1: (0 or 1) wire detected in the bottom 80% of pole -
Slide 32: Example Analysis for Network Viability Assessment
Example Analysis for Network Viability Assessment At whole of network scale - IKE Insight determines pole categories relative to make-ready requirements (category-logic - Example images of each – 3 can be set by the customer through the Insight rules application) - Category 1: (0 or 1) wire detected
Slide 33: Example Analysis for Network Viability Assessment
Example Analysis for Network Viability Assessment At whole of network scale - IKE Insight determines pole categories relative to make-ready requirements (category-logic - Example images of each – 4 can be set by the customer through the Insight rules application) - Category 1: (0 or 1) wire detected
Slide 34: Resulting in Visual Dashboards to Optimize a Network Deployment
Resulting in Visual Dashboards to Optimize a Network Deployment Example from Erie, CO market ikeGPS 34
Slide 35: 10x Faster. 4x Cost reduction.
10x Faster. 4x Cost reduction. Dramatically faster fiber network deployment Takeaways: With IKE Insight, a 200,000 fiber attachment program payback: - deploy >6 months faster - save >$1m in pre-survey assessment costs alone. ikeGPS 35
Slide 36: 1H, Capability added to the IKE team
1H, Capability added to the IKE team More tier-1 hires expected in 2H Brett Willitt, SVP Product Brian Musfeldt, CFO • Former President of structural • Former CFO of Also Energy Inc., analysis and structure where he was part of the executive management software company team that grew the business at
Slide 37: 1H acquisition, extending IKE's training & education capability
1H acquisition, extending IKE’s training & education capability The assets of Marne & Associates . Expanding sales & brand channel for product cross-sales • Marne & Associates specialize in training utilities, communications companies, and engineering groups for the application of the National Elect
Slide 38: 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 39: Thanks
Thanks ikeGPS Manaakitanga: We Rise By Lifting Others 39
Slide 40: 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