ikeGPS Group Limited Provides Q3 FY19 Update

ikeGPS Group Limited provides Q3 FY19 update

The company advises the following relating to its performance for the nine months to 31 December 2018 after its guidance update on 24 January 2019. The company reports revenue of approximately $6.2m which is 5% higher than PCP of $5.9m.

With the formal launch of ‘IKE Analyze’ the company successfully extended its business model in the period. Five new ‘IKE Analyze’ customers were contracted in the period which contributed a small level of revenue in Q3 FY19 but is expected to deliver over 12-18 months between $4-5m revenue.

More than $0.5m software subscription renewals closed in the period and revenue over the subsequent 12-month period will be recognized. 24% higher than PCP of $3.3m the gross margin is of approximately $4.1m. Against PCP of 56% the gross margin percentage of 67%.

The cash on hand is of approximately $4.1m and receivables of approximately $2.1m and the company expects that it will retain a similar cash balance as at 31 March 2019.

The company also announced the appointment of Bill Morrow to IKE’s Board of Director. Including Bell Canada and AT&T Inc., the company expanded sales into several target IKE accounts. Although there is uncertainty around the timing of a large Ike Analyze contract concerning the impact on Q4 FY19, the timing of IKE Analyze deals remains confident about its potential to close and deliver into materially larger IKE Analyze contracts.

The company is delighted to have someone of Bill’s calibre to join them as he brings in global leadership experience across the fiber, the communications, and electric utility markets. Aligns closely with IKE’s geographic market, is the extensive operating experience, and with targeted industries, and broader goal to become the standard pole record in North America targeted.

Adding to the historical model of selling field tools and software subscriptions, Q3 saw the successful extension of IKE’s business model, Milnes added. So that IKE can deliver more value to customers via asset analysis & makes ready engineering, the company leverages the cloud-based pole software platform which provides an opportunity to access materially larger customer contracts.

Particularly in any immediate quarterly forecast, IKE’s focus on scale delivery into large infrastructure businesses inherently brings timing uncertainty around deal closure and some lumpiness to growth. The company believes they are continuing to make important progress within target accounts. However, the response to the ‘IKE Analyze’ proposition from customers and prospective customers has been positive. The company remains optimistic about the potential revenue opportunity over the next 12-36 months.

ikeGPS Group Limited (ASX: IKE) is an information technology stock which is trading at $0.580. The stock has performed well over the last 12 months with over 20.83% positive change. The market capitalization of the company as at January 25, 2019 is $52.47 million.


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