What is an example of what the underlying utility could have done? I don’t really understand the statement tbh
Printable View
What is an example of what the underlying utility could have done? I don’t really understand the statement tbh
I don’t know but it was clearly something between the IKE customer, and another party involved with their operation/development project. Nothing to do with the customer’s relationship with IKE.
If you understand that transaction revenue is fees paid per asset (pole) by the customer, to IKE, it is quite easy to understand that any issues that customer experiences, can have a negative impact on the number of assets they process by the IKE platform over any given period. As I said, something that was completely out of IKE’s control. I am happy with their explanation and even happier with the customer’s reassurances that the issues are resolved, and everything is back to business as usual.
From memory IKE stated that the customers couldn’t use the IKE platform to submit data as the “regulator” used old school processes.
From the call today it sounded like that this could potentially have been fixed, or that the clients next builds will be able to use IKE platform.
IKE also said one of their new products could bring in 5x the revenue of their legacy product, as they have a few different products I wonder what this actually means. They seemed to expect some real growth in revenue in the next 12 - 24 months with new customers and products. With all the tail winds in the sector it seems like even a average company should do really well so hears hoping to getting to a Share price of $1.50 in the next 18 to 24 months.
For Bars review for those interested.
ikeGPS (IKE) reported a subdued 1Q24, with short-term weakness in Platform Transactions partially offset by continued growth in Platform Subscriptions. After +93% growth in FY23, total revenue in 1Q24 fell -18% to NZ$5.6m, as compared to 1Q23, driven by the significant, but well signalled, temporary slowdown in billable transactions. Transactions by number fell -30% to 77k while revenues sunk -45% against the same quarter last year to NZ$2.1m. This transaction slowdown reflects temporary delays in fibre network deployments from two of IKE's largest customers. On a positive note, subscription revenue climbed +35% to NZ$2.5m, with customer growth exceeding our expectations. Group gross margin recovered to 61% in 1Q24 from 54% in 1Q23, however, we consider this entirely from the change in product mix reflecting a higher proportion of Subscription revenues (~84% gross margins) over Platform Transactions (~24% gross margin in 1Q24 versus an average of 32% over the last three years). We retain our FY24 revenue forecast of NZ$38.8m but recognise this requires a solid second half — boosted by industry tailwinds, continued customer wins, a rebound in transactional revenues and the introduction of the updated PoleForeman product to several of IKE's largest customers. Our blended spot valuation rises +NZ6cps to NZ$1.21 due mostly to the continued expansion of multiples in the peer group.
The fall in transaction volumes was anticipated, but more than we expected
The temporary slowdown in transaction revenue in 1Q24 was not unexpected, given commentary provided by IKE at its FY23 result that 1Q24 could track behind the run rate seen in 4Q23. We note 1Q24 weakness should be viewed in the context of the +193% year-over-year lift in transactional revenues during FY23. The fall in transaction activity relates to two of IKE's larger customers delaying fibre network deployment due to "the engineering practices of an underlying utility" in one of the locations where these networks are being built. We estimate these two customers accounted for a large proportion, if not all, of the -NZ$2.3m decline in transactional revenue from 4Q23 to 1Q24, highlighting customer concentration. IKE has signalled that the issue with these customers has been resolved, and we anticipate transactions will recommence with these customers shortly, however, with some drag on the 2Q23 result.
FY24 outlook remains robust — with a number of promising dynamics at play
Despite the temporary downturn in transaction revenue in 1Q24, the outlook for the remainder of FY24 remains robust. To date, IKE has seen no economy-led weakness in fibre network deployment or electricity network hardening work undertaken. IKE expects transaction activity to rebound strongly into the second half of the year as it has streamlined processes with its two largest customers. Further, IKE's subscription business is exhibiting strong momentum. IKE added 15 new enterprise customers in 1Q24, which would equate to +16% annual customer growth if this rate holds. The company has also begun to roll out its next-generation PoleForeman product within its Structural business segment. The new PoleForeman product runs on a "per-seat" subscription model that IKE expects could "generate more than five times the level of subscription revenue per annum per customer... vs the legacy solution". We also consider it possible for IKE's partnership with one of the largest data companies in the world to contribute revenues before the end of FY24, after two and a half years of co-development on AI driven automation.
IKE acquiring things …always positive sign
http://nzx-prod-s7fsd7f98s.s3-websit...624/399533.pdf
Is buying the business/company operations ……not the shareholding. Many ‘acquisitions’ are asset sales
Yep it seems buying the knowledge, materials, training materials etc and probably to leverage a network of potential users
Here’s there website if you haven’t already been there https://marneassociates.com/about-our-team/
holder but not particularly happy about this. if they are good Introducers, why buy them? just pay fat comms. not v SaaS model as far as i can see. should focus more.
Small world!
I 'know' David Marne.
I did some work with him about 20 years ago.
Does IKE have any presence in Hawaii?
https://www.theguardian.com/us-news/...re-power-lines
Another win for IkeGPS …good one
http://nzx-prod-s7fsd7f98s.s3-websit...154/401529.pdf
The $1.5m must include transaction revenue as well...? Either that or their new subscription revenue model is earning a truck load for them..
I was wondering about that too. The transaction revenue on a million + assets is significant. I assumed their figure was not including transaction income, but you could be right.
EDIT: actually no. I read the announcement again and it clearly states “… of subscription revenue” so that implies it does not include transaction revenue.
I have emailed them to ask for clarification. Watch this space.
I cant make sense of it then.
So last quarter they had 394 customers and earned $2.5m sub revenue. Or over say 18-24 months that will be $17.5m roughly.. thats with 394 customers.... or $17.5m/394customers = $44k per customer.
But this ONE customer will generate $1.5m over 18-24 months..
1) must be a huge customer
2) must include transaction rev
3) the new subscription model?
This is an existing customer who has clearly committed to a significant contract after “testing the waters” and having their needs and expectations met. I am guessing they are major player in the sector, with their fingers in lots of pies. It is good news. Very good news.
I think they said the new subscription model would generate less transaction revenue but mean higher quarterly subs. Makes sense as the transaction stuff was lumpy.
I reckon this is what we are seeing
Quite possibly, but customers pay a transaction fee for every asset “processed,” in addition to whatever their annual subscription fee is. So 1 million assets has got to be generating a significant amount of transaction revenue over time. It will depend on how frequently every asset is required to be processed/analysed/checked (or whatever you want to call it), and what the regulatory requirements are for safety related audits.
Hopefully IKE will respond to my email, but I haven’t had much success with that in the past unfortunately.
If all customers do $1.5m per 24 months thats annual revenue of $295.5m :eek2:
Might be worth watching the quarterly numbers a bit closer now.
H124 revenues to be less than pcp
But importantly not lost …..big catch up coming in H2 (hopefully)
So keep the faith
http://nzx-prod-s7fsd7f98s.s3-websit...097/404055.pdf
Q1 revenue was down 18% on pcp
Still hope Q2 was positive ……but probably not 18% positive
They could have been more specific seeing great deal of interest in numbers …leaves them open to speculation
Looking forward, we expect to see continued overall growth, noting that for Q1 and Q2 FY24 transaction revenue was softer on a run rate level due to the traditional engineering practices of one or two utilities where two larger IKE customers are building their fibre networks.
The above sentence part of the Chairs address. What does he mean by this?
"Due to timing delays of engineering programs across three of IKE's largest national infrastructure customers" - so of no concern whatsoever.
IKE has always been very transparent in this regard, and anyone who has been paying attention is well aware that these delays are expected from time to time. The contracts are solid, the revenue is guaranteed. The timing of that revenue may fluctuate however, which is totally understandable if you have any knowledge of the electricity sector. Weather situations in particular can impact engineering projects, and delays are to be expected.
Everything is on track and IKE is clearly increasing their focus on marketing and expanding their sales teams and strategies.
Do you even hold Winner?
I dont see any help for the SP
Responsibility for SP is on shareholders/investors, not on IKE. They are doing exactly what they said they would, and continue to do so. They clearly really understand their market and they are working hard to expand their customer base. The nature of the sectors they service, means this takes time. Of course I would love to see the SP move, as would anybody, but this is a long term hold investment, not a trading stock, so I have patience. Providing IKE continues as they are, and the graphs keep trending upwards, I'm sticking with them.
im not sure about that. At FY23 they said they were comfortable with analysts projections. Today they are saying they will come under those projections. So they are not delivering, something not quite right. Ive always like IKE and held for sometime but sold out as soon as the quarterly revenue stopped growing and disclosed that here. SP is in a downtrend and needs revenue growth to stop that imo.
They have said in the past, and today's statement supports it - that at times, revenue will come in later than expected due to delays at the customer end. Electricity companies building a network for example, are subject to weather related delays, contractor related delays, and quite possibly, even material supply delays. While companies would obviously do their best to mitigate these delays, there will be times where they are out of their control. That has a flow down impact on the timing of their payment for IKE's services. But the contract is signed and revenue guaranteed. So nothing is "fishy" and there is literally nothing to be concerned about.
The (assumed paid) endorsment videos give me the warm fuzzies.
This is true. However they have been very transparent about said 'softness'. The very reason for the current SP lull. Although short term the lull likely to remain there seems to be a lot of support at current SP level, so i don't envisage the downtrend to continue to any great extent. I'm still very optimistic. Hopefully we'll have more insight after the Q & A
Market doesn’t seem too impressed with that outlook for F24
If share price drops another few cents it’ll be a multi year low
Low volume today though
Buyside weak. I'm not sure what's going on here but something is not right. I reckon it all started when IKE stopped disclosing 'contracts won' at the start of the year back when the SP was up at the $1 level. It wasnt long after this that the huge parcel of shares was sold, 4 million by memory in low 90 cent range. Then it has been qrter on qrter of disappointing sales.
SP will continue to suffer until they can start getting runs on the board again. If they start disclosing contracts won again i reckon that is a sure sign that the good times are returning.
The lower the SP goes the more of a takeover target they are.
Who would take them over this early? Would be a big ask for someone on the engineering side. The telco's would struggle to run it efficiently enough to benefit. It'd have to be someone that thinks they can do it better. i doubt many could.
Once established that could be a different story though.
Happy for this SP not to get ahead of itself in the current climate. It is what it is...
Looks like the SP is about to go below 60 cents.
Surely half year isn’t going to be that bad??
Big day tomorrow with results out
Is it make or break time ……but commentary is probably more important than numbers which aren’t going to be that flash
https://www.nzx.com/announcements/420434
Revenue of ~$10.5m (-32% vs pcp).
Strong ongoing growth in subscription revenue (+24% vs pcp).
Slow-down in transaction revenue due to delayed engineering projects with long-term customers, with volumes expected to resume.
IKE performance update for 1H FY24
ikeGPS Group Limited (IKE) (NZX: IKE / ASX: IKE) is pleased to release an update for 1H FY24 to 30 September 2023 (all figures in NZD).
Highlights for the quarter:
Revenue 1H FY24 of ~$10.5m (-32% vs pcp).
Subscription revenue was ~$5.1m (+24% vs pcp).
Transaction revenue was ~$3.7m (-60% vs pcp).
Gross margin 1H FY24 of ~$6.2m (-24% vs pcp), reflected in the revenue mix above.
Gross margin percentage 1H FY24 of ~59% (up from pcp of ~53%).
Cash and receivables as at 30 September 2023 ~$16.3m, comprised of $10.2m cash and $6.1m receivables, with payables of $1.2m and no debt.
Headline numbers don’t look good will read the report later
Lucky they have a relatively strong balance sheet and dont need to raise capital.
IKE setting a new 52week low today. Trading 3x FY23 revenue so in today’s environment it’s a bit expensive still. Could halve from here even.
All good thou, on the next bull run it can trade 5x revenue no sweat
The trouble is half year was 32% behind pcp so IKE are going to have to have a huge H2 just to be on par with FY23. And based on H1 commentary I do not sense they are confident in this.
So potentially it’s trading at an even loftier forward revenue multiple than their backwards.
Hence the potential for a re-rate down to 1.5x revenue. Only those saas companies that grown revenue double digits deserve 3x + multiples
Fair enough, they can't control their customers or their rollouts, so seems reasonable to temper confidence in their commentary. But that said, the rollouts will happen and the revenue will follow, be it this or next quarter or the one after that. Those deals/revenues are locked in, it's just the timing that's in question.
So as the market re-rates IKE down on uncertainty of when the revenue multiple expands, it's just another opportunity to get some while the short termers unload on the uncertainty of when it will happen. Anyway, TA suggests backing up the truck isn't a good idea right now, but when it does, imo it will re-rate upwards very quickly and one needs to be positioned for it.
https://www.nzx.com/announcements/422572
Highlights for the half year, with results in line with the performance update of 26 October 2023:
Revenue 1H FY24 of ~$10.5m (-32% vs pcp).
Subscription revenue was ~$5.1m (+24% vs pcp).
Transaction revenue was ~$3.7m (-60% vs pcp).
Gross margin 1H FY24 of ~$6.2m (-24% vs pcp), reflected in the revenue mix above.
Gross margin percentage 1H FY24 of ~59% (up from pcp of 53%).
Net loss was ~ -$6.9m (pcp $1.1m profit). This change was primarily due to:
Gross margin of $6.2M (-~$2m vs pcp)
Foreign exchange and asset fair value movements of $0.3m (-~$4.7M vs pcp).
Cash and receivables at 30 September 2023 of ~$16.3m, comprised of $10.2m cash and $6.1m receivables, with payables of $1.2m and no debt.
see ya at 20 cents
All about the Q3 update
She'll be fine
I feel like there's a buyout opportunity for IKE before they reach their profit promises. I will wait patiently for either.
It’s not cheap enough to warrant a takeover imo. The revenue/price multiple needs to get down to 1.5x
Just the title from NBR: https://www.nbr.co.nz/investment/ike...-6-9m-hy-loss/
IkeGPS cuts staff by 19%, posts $6.9m HY loss. Pole measuring software provider says communications market slowdown has affected revenue, but long-term trend still positive.
oh dear this is starting to timberrrrr hard. I did post not so long ago the SP could halve
was $1 not long ago. might do a 80% drawdown from its high
52,000 shares on offer at 41 cents. Wonder how long until someone says f*&% it and sells into it
This company need a quick turnaround. Not too sure how long the cash pile will last with the losses it has experienced. If it continues $6 million cash burn for every half year, capital raise will be needed by the next year-ish
Must be IKE’s turn to get an offer to buy them out
Really only them and Wgtn Drive left of the oldie tech outfits that have frustrated punters for years
Their turn will come
Glen sounds very upbeat abt the new contract win and future of new pole tech platform launched recently.
Love the ‘tip of the iceberg’ bit
http://nzx-prod-s7fsd7f98s.s3-websit...990/410120.pdf
Well the contract subscription is about 3.7m.
Based on the historical gross margin of subsciption revenue(I am assuming 80% Gross Margin to be more conservative)
=$3.7m X 80% = $2.96m.
1H FY24 Subscription Gross margin was $4.5m
Plus the new contract is $4.5+$2.96=$7.46m
That is a 65% increase in gross margin ($ value)
If Glenn says is true, they get $6-$7m of additional subscription revenue, The subscription revenue will be about $11m ish witha gross margin of $8.8m(I use 80% GM)
Its good to hear news like this. Will keep a closer eye on the business.
Disc. Do not hold
This is the first bit of good news in a long time. Could save the SP.
The extra sub revenue bit is interesting indeed
Off its low ( for now ) momentum building imo.
That's a pretty good ski slope....
Attachment 14904
Makes me feel better
http://nzx-prod-s7fsd7f98s.s3-websit...034/411221.pdf
Anyone want to take a guess as to the results?
Yikes Ike!! :scared:
https://www.nzx.com/announcements/425847
ikeGPS Group Limited (IKE) (NZX: IKE / ASX: IKE) is pleased to release an update for the nine-month period to 31 December 2023 (all figures in NZD).
IKE will host a webinar 8 February 2024 at 11am AEDT/1pm NZDT to discuss performance and outlook. To register, please click:
https://us02web.zoom.us/webinar/register/WN_k6Z1Ze4oSampfz-39DwurQ
Highlights:
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 of ~NZ$8.8m (-28% vs pcp), with a gross margin percentage of ~58% (up from pcp of ~53%).
Total cash and receivables as of 31 December 2023 of NZ$15.2m (vs NZ$16.3m at 30 September 2023), comprised of NZ$8.0m cash and NZ$7.2m receivables, with payables of NZ$0.8m and no debt.
Noting that as at 31 January 2023, cash increased to NZ$11.0m and receivables decreased to NZ$3.5m.
Commentary and outlook:
IKE CEO Glenn Milnes commented, "Q3 FY24 was a stronger period at IKE. Customer wins and growth in recurring subscription revenue was strong, and the adoption of our recently released IKE PoleForeman product by key clients underscores its value & capabilities and sets a precedent for further adoption across our expansive customer network in the coming quarters.
Recent subscription sales highlights included:
- Signing a ~NZ$3.7m subscription contract with a Fortune 150 Company and one of the ten largest Investor-Owned-Utilities (IoU’s) in the U.S., upgrading them from IKE’s legacy product to our new IKE PoleForeman structural analysis platform. Over the coming five years, this long-term customer commitment means over 1,000 engineers at this utility will use IKE PoleForeman’s advanced capabilities for network design. This upsell signifies a more the tenfold increase in annual recurring revenue from this customer versus IKE’s legacy product (~NZ$70k p.a. increased to ~NZ$700k p.a. subscription revenue), demonstrating the value of the product to the customer.
- Early Q4 we closed another large U.S. electric utility to a ~NZ$450k three-year subscription contract for IKE PoleForeman, representing a five-fold increase in annual recurring revenue from this customer versus our legacy product.
- In addition, we signed a large national engineering firm to a ~NZ$0.5m three-year subscription contract, also for the new IKE PoleForeman product.
o The signing of these long-term subscription contracts, at dramatically increased revenue levels and with multi-year commitments, demonstrates the value of this new product and validates our ability to transition tier-1 infrastructure customers. Additional large subscription contracts from U.S. utility groups are imminent over the coming months.
- Subscription deals for our IKE Office Pro included signing 12-month contracts for ~NZ$0.2m with one of the largest communications groups in North America, a ~NZ$0.3m subscription contract with a national engineering group, and a ~NZ$0.25m subscription contract with another national engineering group.
In terms of transaction revenue, positively, we have seen an uptick in closed contracts as well as various outsize pipeline opportunities being progressed. Recognized revenue continued to be low in Q3 relative to pcp however. This slow-down has been well signaled to the market, with several major IKE customers in the U.S. communications segment having network projects slowed, mostly with unrelated regulatory impediments. We continue to reiterate that these long-term customers are not lost, and they have communicated their expectation that the multi-year outlook for use of the IKE platform is robust.
For further performance information, graphs, and detail please see the attached release.
Latest update
Seems they have the column headings in the revenue table wrong way round …..did I see F24 revenue way down on PCP
http://nzx-prod-s7fsd7f98s.s3-websit...847/412184.pdf
Sold out at 107.
Have not been tempted back in yet.
Not good. The transaction revenue has fallen off a cliff. I dont think they have a true sense of when it will return to FY23 levels. They just say it will build into FY25. So sounds to me still down on FY23.
Say they do low $20m revenue for the year.. it means they are trading 4x revenue which was okay back in the free money days but now considered expensive
Been a frustrating couple of years to say the least.
Subscription revenue is climbing and customers are growing which does bode well. Its a shame those customers aren't up to much...
Getting traction from some worthwhile customers which should mean reoccuring revenue for years to come if all goes to plan ( a very important word that "if " !! )
Im buying the dips !
I’m still trying to like IKE ….the story they tell is so amazing
But a chart showing revenue trends belies the story. Sales been in decline the last year
I obviously just don’t get it
IKE acquired Marne last year and a year or so before that an AI outfit
Suppose all part of the growth story but that revenue chart worries me.
The big capital raise at $1 in 2021 doesn’t look too flash now
Hey rawz ….latest report on revenue multiples from Clare
https://assets-global.website-files....2020240212.pdf
Another big win for IKE
http://nzx-prod-s7fsd7f98s.s3-websit...467/414303.pdf