ikeGPS Q3 FY21 performance update

ikeGPS Group Limited
350 Interlocken Blvd, Suite 390, Broomfield CO 80021, USA
Office: +1 303 222 3218
www.ikegps.com



FOR IMMEDIATE RELEASE
12 February 2021

Q3 FY21 performance update
Acquisition of Artificial Intelligence software business

ikeGPS (IKE) is pleased to release an update for the quarter to 31 December 2020 (all figures
NZD).
The IKE platform allows electric utilities, communications companies, and their engineering
service providers to increase speed, quality, and safety for the construction and maintenance
of distribution assets. The revenue engine for IKE is driven be the number of assets being
processed through the IKE platform. In the Q3 FY21 period, less engineering activity occurred
on certain network projects while COVID-19 response measures were put in place in specific
U.S. regions. Deferred contracts in Q3 are generally transitioning to delivery and recognized
revenue from Q4 FY21, which IKE expects to grow against prior calendar period (pcp).

Highlights for the December 2020 quarter:
＋ The process to acquire certain assets of Visual Globe LLC, a US-based Artificial
Intelligence (AI) and low code software company that specializes in the automated
analysis of power poles from very large data sets.
＋ Revenue in the quarter of approximately $2.1m and approximately $6.5m YTD (pcp of
$7.3m) reflects a solid outcome in the context of Q1 and then Q3 periods disrupted by
COVID-19 impacts on customer projects.
＋ New contracts closed in Q3 FY21 were for approximately $2.5m.
＋ Gross margin of approximately $4.3m (pcp of $5.2M), with a gross margin percentage
of approximately 67% (pcp of 72%).
＋ Total cash and receivables 31 December 2020 of approximately $18m, with no debt.




Takeaways
❏ IKE’s revenue mix has shifted materially with greater than
75% of revenue expected from transaction & subscription
sources in FY21 (shown by the blue bar in the chart).
❏ This is an important transition in terms of increasing
revenue quality and predictability to underpin growth.

ikeGPS Group Limited
350 Interlocken Blvd, Suite 390, Broomfield CO 80021, USA
Office: +1 303 222 3218
www.ikegps.com



Q4 FY21 outlook
＋ The final quarter of FY21 has commenced strongly.
○ Approximately $3m of new contracts have been closed in the initial five weeks
of Q4, laying a platform for a significant sales quarter.
○ New contracts won are supporting network projects for important underlying
customers including AT&T Inc. (the world’s largest communications company),
Corning Optical Communications Inc. (the world’s largest fiber optics
manufacturer), and ALLO Communications (a communications business
operating across Nebraska and Colorado).
○ Several deferred projects from Q3, as detailed above, are coming online as
specific impacts of COVID-19 ease.
＋ IKE’s focus for Q4 FY21 is on three core items: The delivery of contract backlogs, the
extension of revenue opportunities from existing customers, and integration of the
recently acquired AI-software business.

Research coverage
＋ Bell Potter (https://bellpotter.com.au), one of Australia’s largest full-service financial
advisory firms, has initiated research coverage on IKE. The associated report outlines
the growth potential of the business.
＋ From Q4 FY21 IKE will report additional quarterly metrics. These additional key
metrics include transaction revenue, Platform-as-a-Service revenue (PaaS), and the
number of PaaS customers subscribing to the IKE platform (vs legacy business model
Software-as-a-Service subscribers).

Acquisition of assets of Artificial Intelligence software business
＋ A significant focus in Q3 was acquiring certain assets of Visual Globe LLC, a US-based
Artificial Intelligence (AI) and low code/no code software company that specializes in
the automated analysis of power poles from very large data sets:
＋ This strategic acquisition complements IKE’s existing offering and aligns with the
Company’s vision to become the standard for collecting, analysing and managing
power pole information.
＋ Visual Globe’s AI platform provides the potential for IKE to grow its addressable
market within the electric utility and communication industries and to significantly
increase the number of transactions that can process efficiently on its platform.
＋ The addition of Visual Globe’s technology will enable IKE to process extremely large
volumes of pole data that can be collected from new additional sources including
drones and smartphones, making the Company’s platform even more attractive to
electric utilities and communications groups in the North American market.
＋ The consideration comprised an initial payment of US$3.3m in cash and with a
potential earn-out component comprising up to an additional US$4.99m of cash and
up to US$2.1m of IKE shares. The earnout payments are subject to the acquired
assets delivering revenue targets totaling US$21M in aggregate over the period to
March 2024 (80% of the total earn-out) and the retention of key people to 31 March
2024 (20% of the total earn-out).

ikeGPS Group Limited
350 Interlocken Blvd, Suite 390, Broomfield CO 80021, USA
Office: +1 303 222 3218
www.ikegps.com






Customer and market commentary
IKE targets sales and deployments into North Americas largest communications companies,
investor-owned electric utilities, and their engineering service providers.
＋ Q3 FY21 customer wins included a large contract with a major US electric utility.
○ IKE signed this important agreement in Q3 FY21, to help this utility assess its
power distribution infrastructure in a fast, safe, and reliable way. Under this
contract IKE will initially analyze 250,000 assets, a small subset of the Group’s
asset base.
○ The initial phase for this project is expected to be extended into FY22 and to
grow in total to approximately $850,000 revenue. It is now anticipated that
approximately $400,000 of this network project will be recognized in IKE’s 2H
FY21 (the period ending 31 March 2021).
○ The parent company of this customer is an American Fortune 100 energy
business with similar companies in its portfolio. This agreement follows a
successful pilot program, with the onboarding and implementation process
immediately going live from October 2020. Significantly, this is the first major
cross-sell from IKE’s acquisition of the assets of Powerline Technology
completed in October 2019.
＋ Other Q3 wins included with Clear Connection LLC, supporting fiber optic engineering
in California, Nevada & Arizona, and with prominent fiber engineering groups in
Washington and Texas.
＋ Several market tailwinds support the high growth potential of the IKE business, with
more than $350b forecast to be invested into fiber and 5G infrastructure over the next
five plus years and with more than 3,000 electric utilities needing to address the
challenges of network build, strengthening, and maintenance, The IKE platform
delivers network construction and maintenance processes that are faster, safer, and to
a higher quality data standard.



ENDS

About ikeGPS
IKE seeks to be the standard for collecting, analysing and managing pole and overhead asset
information for electric utilities, communications companies, and their engineering service
providers.

Contact:
Simon Hinsley, Investor Relations, +61-401-809-653, simon@nwrcommunications.com.au
Glenn Milnes, CEO, +1 720-418-1936, glenn.milnes@ikegps.com