ikeGPS Group Limited (ASX: IKE) has announced two important customer wins today. The company has advised that its IKE Analyze solution has signed contract with two of the major Communications, Fiber & Infrastructure companies operating across the North American market. The customers are Charter Communications Inc. - the largest cable company in the U.S., and Crown Castle Inc. - the largest provider of shared communications infrastructure in the U.S.
With these customer wins, the company has taken another step towards the company’s goal to have IKE Analyze become the standard work flow and data standard for aerial-make-ready engineering for communications & fiber network deployments.
According to the company’s CEO, Glenn Milne, the company is winning these customers for simple reasons; IKE Analyze enables networks to be deployed faster and with a higher quality data standard. The company has been witnessing very high levels of investment and activity across the market specific to fiber and 5G network deployments and expect this trend to continue, or increase, over the next five years. The company is also expecting that more of the larger players in the North American market will become IKE Analyze customers in the medium term.
For the full year ended 31 March 2019, the company is expecting revenue from IKE’s core Utility & Communications segment in North America to be greater than 25% higher than the previous corresponding period (pcp). The company believes that this is due to the growing IKE Analyze solution revenue and increased software subscription revenue. It is expected that total FY19 revenue will exceed FY18 and is expected to be approximately 5% higher than pcp. Further, total FY19 gross margin is expected be greater than 35% higher than pcp.
The company has completed the process to extend and enhance its revenue model with the IKE Analyze offering. IKE Analyze leverages the company’s cloud-based pole software platform so that IKE can deliver more value to a customer through asset analysis, make ready engineering and other analytics. Due to this around 80 percent of FY20 revenues are expected to come from recurring software subscriptions or via ongoing use of the IKE platform by existing and new customers, via IKE Analyze transactions.
The company’s focus on scale delivery into large infrastructure businesses inherently brings timing uncertainty around deal closures and consequently some lumpiness to growth, particularly in any near-term forecast.
The company recently announced the appointment of highly experienced Mr. Chris Birkett for the role Chief Operating and Financial Officer. Mr. Chris is having a real depth of capability and experience in Operations leadership and also has an intimate knowledge of the company's people, processes and products given his Chief Financial Officer (CFO) activities with IKE over the past two years.
IKE’s shares last traded at $0.500 with a market capitalization of circa 45.24 million as on 10 May 2019.
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