IKE - Ike GPS.com

[Rawz]

What is an example of what the underlying utility could have done? I don’t really understand the statement tbh

[justakiwi]

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.

What is an example of what the underlying utility could have done? I don’t really understand the statement tbh

[Forrestdun]

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.

[Greekwatchdog]

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.

[justakiwi]

100% agree with this. Thanks for sharing.

For Bars review for those interested.

[winner69]

IKE acquiring things …always positive sign

http://nzx-prod-s7fsd7f98s.s3-websit...624/399533.pdf

[justakiwi]

What does "acquires assets of" mean? They are not buying the company - what exactly are they buying? The training materials/access to the training platform?

IKE acquiring things …always positive sign

http://nzx-prod-s7fsd7f98s.s3-websit...624/399533.pdf

[winner69]

What does "acquires assets of" mean? They are not buying the company - what exactly are they buying? The training materials/access to the training platform?

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/

[justakiwi]

Oh, ok. So IKE will now operate the training side of the business, but not have a shareholding? So are they able to do that completely autonomously, or are they the company still oversee/have a say in how they operate it?

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/

[winner69]

Oh, ok. So IKE will now operate the training side of the business, but not have a shareholding? So are they able to do that completely autonomously, or are they the company still oversee/have a say in how they operate it?

If it’s how asset sales normally work IKE will control / run the business ….with Mr Marne no doubt guiding them as an employee / manager