ikeGPS Group Limited

I'll hand it over to you. Great. Thank you, Simon. And thank you, everyone, for taking the time to join. We've had a lot of information in the market over the last two months or so in terms of the year end and the audit and then the annual report. But please update everyone on the first quarter. It's been a really strong quarter. It's ahead of our plan, ahead of our targets. And Paul will take you through the numbers, but we were about 31, 32 percent up against prior calendar period in terms of exit run rates for our subscription revenue base. Gross margins kept improving. I think the thing that as owners of the business and shareholders you'll be most interested in is where we are in terms of coming to market with three new products and I would like to take you through those because they will drive we hope if we execute well materially more ARR growth based on a customer council and industry demand in terms of what we are building and we are being a little bit coy at the moment because of competitive factors around exactly what we're shipping through the second half of this year but uh we we do have a new platform coming that takes us into the the management of the electrical side of the grid you know taking power from the distribution assets on the street into the into a home or a business uh we've got a a next generation product coming that takes us into make ready engineering so that means Electric Utility can design and develop more capacity in terms of their grid infrastructure and we've got a new communications module for the fibre industry. So all of these things are in flow and wanted to make sure everyone's up to speed on that. It's what we got funded to build and develop. And then there's a final thing around AI. We've now got our entire Ike-specific platform up and running. This is something everyone's reading about it. We're all looking at the same media, etc. But we have an Ike-specific platform called Vitruvius, which is now driving a lot of not just how we do things which is very Ike specific it's around the electrical grid but it's also how we put AI inside of our products but I'm going to hand over now to Paul and scroll down this document so please bear with me and Paul will take you through the numbers so Paul as you know is our CFO we're both based out here in Colorado so Paul

Thank you, Glenn. I'll just start by clarifying. I know that many of you commented and have seen an amended release. I just want to call out that being very consistent with what we shared last quarter, our guidance for subscription revenue is similar growth rate to what we saw last year. And that was an edit that we caught as we went to market. So I just want to clarify that you are seeing the amended release. The guidance is really the major change. Again, a very high guidance and similar to what we saw in FY26. If I look at the exit run rate, so this is our ARR run rate at the end of June 30th, you can see a very strong continuation of the growth, 22 million at the end of June FY26. Sorry, 2026, that's our FY27, comparing with 17 million in the period last year and 13 million the year before. That's a 31% growth rate. Granted, FX helped by three to four basis points, so still a very strong quarter for us. and that's a continuation of a very strong CAGR at 30%. So our exit run rate ARR growing compound annually at 30% and it was 31% for the annual comparable. Just moving to subscription revenue, We've talked a lot in the past about growth coming from new logos and upsells, cross-sells to existing customers. One thing we don't talk about too much is the churn. We see very low churn in our business, certainly in the last few months and even looking back last year. So we have a very sticky solution. Customers are buying it. We don't lose a lot of revenue. and you can see on our platform subscription revenue chart is a 27% growth year over year for the first quarter of FY27. Just going down to the next slide, it's really the seat comparable. Again, looking at our products and more from a seat perspective, we do predominantly sell on a per seat model for our subscriptions. We are looking at our new products and pricing models associated with that, but you can see 19% seat growth. So really the 19% seat growth shows that Many of the seats we're selling are at a much higher price. Clearly our subscription revenue outpacing seat growth, so definitely getting more from our price increases as well as higher pricing from some of the customers that we're selling to. So again, continued strong seat growth through the first quarter of FY27. If you jump, Glenn, now to the next slide, one thing to talk to is our transactions revenue. So this is our services business where we do services work for some of our customers. Most of it, but not all of it, is heavily predicated on our telecommunication, broadband, fiber business. And we've commented on past earnings calls or performance updates about BEAT funding, government funding, and a change in the US administration. And the bottom line here is it has been slow in terms of projects in the market. Read this slide as macroeconomic, not execution by the business. We feel this is a low point for us. There is line of sight to projects, but again, freeing up that broadband funding for rural fiber rollouts has taken longer than we anticipated. That's reflected in these numbers that you see here. I don't know, Glenn, if you want to comment on that, or you want me to just keep going? Sorry, you're on mute. Hey, Glenn, you're on mute.

Yeah, we believe that The fiber market has not gone away and we've got line of sight, I think, to the next three, four, five years of fiber projects. And so, yeah, there has been a bump in the road. And this is the services-based item. Remember, all of these customers use our software. Then we're adding a value-added service over the top of it is the way to think about this business. And the next chart actually talks to that quite strongly if you look at how... the pure subscription part of the business has grown in terms of ARR.

Yeah, so continuing on, if you look at the stacked bar chart at the bottom of this page, you know, Ike has intentionally gone to evolving to a heavily focused subscription-based model. And you can see that kind of in our dark blue in terms of the mix that the revenues now have coming from subscriptions. I think it's important to note, this is a very recurring predictable model for us. It's also driving a lot of the gross margin accretion that you hear us talk about, which gives us way more operating leverage to invest in some of those new products that Glenn mentioned at the beginning of the call, as well as the AI initiatives that we've got within the company and in our products. So that subscription business model shift is reflected, I think, quite well visually on this slide you can see how we've moved away from being a hardware one-time revenue business as well as you know less services revenue granted some of it macroeconomic but clearly the mix of our business has shifted over these last three years and you know we'll continue to see you know that kind of shift as we move forward leading to higher gross margin I'll wrap up with just kind of the metric slide, which kind of summarizes everything. So if we can just move down to the last page. So you can see revenue, you know, flat, you know, year over year, looking at Q1 of 27 versus 26. You know, as I mentioned, gross margin improvement by 7%, heavily driven by our product mix, revenue mix. We continue to add a significant amount of customers. We're up 8% using a trailing 12-month subscription customer count. And you can see the growth rates I've talked about already, not just in our subscription revenue, but also our subscription margin. We continue to see improved gross margins in that business as we scale the product lines. Hardware and other performs well. I mean, it's a small revenue stream, but you can see fairly decent gross margins on that side. And then really the transaction revenue count is really, as I commented earlier, showing negative margin. We do have a cost structure that requires a certain level of services to support. Again, we are, I would say, cautiously optimistic for second half. But, you know, potentially CQ1 is a low point in that business as we look for more funding to free up and more projects to come our way. So, you know, more to come on that. I'll wrap up and say, you know, thanks, everyone, for calling in and hand it back to you, Glenn.

Thanks, Paul. So... Yeah, the items I was just keen to highlight tie into subscription revenue growth which we expect to continue where we also intend to continue to increase pricing through this year in terms of a growth driver the more capability we build inside of our software we intend to charge for and then I think the really exciting thing is what we're doing with new products which I mentioned in particular is moving to a new platform that means that we're managing the electrical side of the distribution grid in terms of getting power to customers and all of the infrastructure that's involved. So think of transformers all the way through to smart meters in terms of power management. That's very close to being in being fully developed. We're working with a customer council of the biggest utilities in the United States who have asked us to build this for them. But this will be applicable to the entire industry. And if we get it right, I think per customer pricing for this new product is much more significant than the products we have in the market right now. And I won't just yet talk about what we think those numbers look like, but we do think it's exciting. last thing is it's a topic that everybody is looking at and we're all reading the same stuff is around AI you know whether it's a threat or whether it's a tailwind and we do truly believe it's a tailwind for Ike with we're now putting AI inside of our products and we're charging more for our software we have a proprietary database of more than 20 million human engineered power assets. And we don't think our customers are going to build our software to replace Ike. And we're obviously keeping our eye on the ball in terms of usage. So we're running dozens and dozens and dozens of agents. So agentic AI, that's where you ask to do work on your behalf rather than a person. And we're watching how customers are using that technology. But we just see this as a massive opportunity. And within the next couple of months, we will actually set up a demonstration of our internal system so you can see what we're doing. in terms of our internal AI system. We call it Vitruvius, Vitruvius was a Roman architect and that's what we're basing our system around. I think those are the key items that we wanted to cover in this outlook. Again, the takeaway is You know, a very strong quarter. We were, you know, ahead of our plans and our targets. We're excited about the quarter ahead. And obviously, both Paul and myself are available anytime to connect. But Simon, I might throw to you, if I can, and for any questions that have come in.

Thanks, Glenn. Thanks, Paul. I'll just get to a few of the questions that have already been submitted first. Sinclair Currie at MA Financial asks, can the team provide some quantification of how the sales pipeline for the new products is emerging? For example, have customers already committed to take the new solutions?

So... What we've done and what we did actually with the Ike Paul Foreman product is pull a customer council together and these are not mid-level people, they're the standards directors inside of very large electric utilities, and they engage on product design, we do not ask them to contract to a product because that can cause more problems than it can create benefit. So the answer to that is no, we don't have forward contracts. But we do have total engagement from the business decision makers within these utilities. And it worked for us well the last time we followed the same process.

In terms of the revenue model for the new solutions, is it going to be per seat, per module or something else? And how does management see revenue scaling in 27 and beyond?

Well, we expect to keep growing at similar growth rates or higher, potentially. And the utility market does still operate on a per seat basis. And we want to keep our eye on how that evolves. But we do not want to be the first to move to a usage model. And again, it kind of comes back to this AI discussion. Everyone's looking at a usage, token-based revenue model, that may happen in the electric utility space, but right now it's not something that they are using or considering.

In terms of the forward revenue growth guidance you've spoken about in the releases, how much of that is dependent on the rollout of new products?

I can answer that, Glenn, if you want me to take it.

Yep.

I think what's important, Simon, I've seen some of the questions, is the timing on these releases. We can't take any revenue until they're launched. And we've said launch is second half. What I would say is we heavily look at our sales pipeline. And in that pipeline, we do see some visibility. We see a lot of visibility into... opportunities to take the new products but with the timing of the launch and the starting of the revenue recognition clock the impact at least this year is likely to be positive impact will be more in the fourth quarter so I think what's important is between now and the fourth quarter again launches before that potentially but you know we've got to get the deal signed the products rolled out and typically you do pilots before you launch so The takeaway for FY27 is there is revenue growth assumed, but it's later in the year, just timing with the launch and finishing the sales process. And I think just to address another question, so online tied to this is, yes, we do need to launch these products for a continued fast growth path into FY28. We've not given guidance for 28, but yes, we need to keep improving or expanding, I should say, our footprint within the utilities. And these new products we feel very bullish about, which will impact positively our 28 growth. But again, just answering the question, we have pipeline visibility, revenue impact likely to be coming later in the year.

I have a question around the language around new products has changed quarter on quarter from beta launch to coming to market. as well as three products from two modules. Are new products ahead of expectations on delivery?

No, they're on target. They're not ahead. I think the thing that is ahead is... We've built a full AI-first system in terms of developing the products. It means we can do it more cost-efficiently and faster, ultimately, than what we'd anticipated maybe 12 months ago. The whole world's living in this environment, so we're on track in terms of getting to market time-wise.

And last submitted question from Michael Ardrit, Bells. Are there any existing competing products for the electrical management platform or product?

Yes, there are. And that's why we're being somewhat... Koi around what it is we've built, but there is an existing solution that we think has got some significant weaknesses. And it's a product that's been developed by one of the very large industrial technology companies in the electric utility market. So we think we can be better on many fronts, not just the product, but on delivery and service and customer experience and support. And as I mentioned, we've got more than a dozen of the biggest utilities in the United States that are working with us on developing this next generation of this tool.

Go ahead Jules, Kubrick, Shaw and Partners. Jules, please go ahead.

Oh, thanks, guys, for taking the question. Just a couple of just sort of follow-ups, I suppose, on what you've presented just now. Glenn, you talked about the revenue model being seat-based in the industry. I just wanted to sort of press in a little bit because you'd sort of talked about as you're bringing new AI features to your customers, you know, you will look at price increases, I suppose. I just wanted to sort of clarify how you, you know, if it's not usage and we've got some token costs maybe that's sort of being embedded in some of the functionality, how you're thinking about sort of recouping that with your seat-based model. That's the first one. And then second, just when we were talking about the timing of product releases, I think you sort of suggested that there'd be some contribution in the fourth quarter from these product releases and benefit to the business. But could I just ask, have you taken a conservative stance around that or does the guidance for this year heavily rely on a successful launch? It's really just kind of what you've baked in versus providing some conservatism.

Yeah, look, on the first one, Jules, thanks for the question. We do try to take a conservative stance on guidance because there's no upside in being aggressive on the guidance side of things. I think on the The item, we're all watching this, right? And, you know, just hearing you talk in the, you know, TechRise conference, everyone's watching what's happening with consumption-based pricing versus seat-based. But, yeah, we need to keep our eye on the industry and see if they become sophisticated enough to use agentic AI to use our software. And then it's always just value based pricing. So this is how much value we add to your business. Therefore, this is what you're going to pay. And I think it's a bit of a distraction at the moment from certain software companies in terms of pricing model, because so long as your software is delivering a lot of value to a customer, then you can price it accordingly and We're not seeing any evidence at the moment of agent-based usage of software in the electric utility market. It will get there eventually for sure, but it's not something that we're seeing with our customers just yet.

Excellent. All right. And thank you very much for the sort of additional detail around the new products. Looks really exciting.

It is exciting and I think as shareholders and investors it's something that we can't over disclose in terms of what we're building because we've got competitors and things but it does take us into a really interesting new space so hopefully it will be if we execute well and there's still lots of risk around bringing this to market and delivering successfully but we do think it will add a lot of value into the company Excellent, well

James Lindsay at False Heart Bar. James, please go ahead.

Thanks Simon and good day gents. A few from me if I may. So previously, thanks for the sort of conversation around the pricing side of the new products. But module one, I think if I recall correctly, you talked about pricing sort of being well north of the $2,000 per sort of seat for Paul Foreman. Is that still the case for you, any of you?

Yes, if we get this right, I think it's considerably higher value. So we're going into actually managing grid infrastructure and the flow of power through a network, and it's a much higher cost problem for a utility and quality problem for a utility. So lots of work to do, but if we get it right, I believe we'll be able to price for it.

Right, and just with regard to implementation inside customers, is there any customization required for that product to be included within a customer, or could rollout be relatively quick and seamless?

Yeah, it's the latter, and that's the exciting thing. is more around managing power flows than around the regulatory or standard side of an electric utility. So I think that makes it really interesting. It also means, if you think about international markets, With what we do today, we're very much based on standards and regulatory rules, etc., in terms of how we design assets. And this potentially means we can go into other international markets without that constraint.

And you mentioned, Glenn, just with regard to some level of visibility on that transactional side of things. Obviously, you mentioned that this quarter is a low point for that transaction side of things, and obviously with a negative gross margin, not such a good position to be in. But would you think that the transaction side of things would get to a positive gross margin by the end of the year?

Well, yeah, Paul can comment on the financial element of the transaction business. But I'll just make the point. We focus heavily on customer experience and brand and full service delivery. And this technology enabled service is something that certain customers really love. And it goes up and down. It's just like our training and education department. All of these companies are using our software so that they're paying us subscription revenue and then we help them when they need additional capacity in terms of a project. And then Paul can comment on where we sit in terms of profitability.

Yeah, today, James, we know the level of revenue we need to break even. And so, you know, as the second quarter progresses, you know, we're keeping an eye on the leading indicators as we go into the second half. Short way of saying, you know, we've got to either lower the cost or increase the revenue to ensure that we do have something north of break even as we exit 27. So that would be the goal, yes.

and again reiterate that it's nice to see the extra sort of commentary with regard to the products as well just with regard to module 2 and that did look to be just a little bit faster and as you mentioned that maybe AI has helped you bring that forward a little bit and just any sort of lead into pricing yet with regard to for that module 2 I think on

Module 2 that James is referencing here is tied to some make ready engineering automation inside of Ike Office Pro. That won't directly be tied to price increases. What we're doing with the Ike Paul Foreman product, we do intend to increase pricing perhaps 30% through the next few quarters and bringing customers up to a substantially higher price point. So yeah, that obviously just will flow through to the ARR number.

Yeah, that was actually a good lead into the next question, which was you had obviously previously highlighted that you would be reviewing pricing for Polforma after implementation. So that's good to see that flowing through. Just with regard to R&D, obviously you've had quite a number of products under development at the moment, which is fantastic. And obviously with that funding that you raised money for, I'm just interested in how you would see total spend either capitalized or expense for next year and how things will flow through.

I can take that one, Glenn. So, James, if I look at our R&D spend in Q1 versus Q1 last year, we're up about 15%. before adjustments for capitalization. We're up about 10% after adjusting for capitalization. So we have increased the R&D spend 15% in terms of dollars out the door. And a lot of that, as we mentioned, released tied to the fundraise to really get these products launched. I would anticipate for the year to be in that high teams growth rate in terms of our spend just to really make sure that we're investing to ensure the success of those launches. Short answer, 15% year over year for Q1. Continue to see that similar growth rate for the year.

I suppose an extension of that question, just with regard to going into the next year, would you expect that number to come back or now that you've got momentum and new product stuff that you'll just continue to go harder and faster?

Hard to answer that, I would say right now, given a lot of our roadmap visibility is about 12 months out in terms of tangible release dates and functionality. To me, it depends on strong growth into the second half. Market opportunity remains bullish. Then if we see investment opportunities to continue to bring products to market, we could spend at that rate. But again, we'd want to make that guidance call later in the year.

Great. Thanks, gents. And again, well done. Cheers.

Thanks.

And Glenn, Paul, that concludes the Q&A. I'll just hand it back to you, Glenn, for closing remarks.

Thanks, Simon. Appreciate everyone taking the time. As always, both Paul and myself and Simon are available anytime for a call or some follow-up questions. But otherwise, our next update will be just in sequence so it'll be towards the end of the month of October in terms of our half year financials so yeah look forward to being in touch then but I would encourage everyone to subscribe to our LinkedIn channel in particular, when we're talking about these new product releases, that's the place to see what we are doing in terms of new technology and new capability. And there will be some activity there between now and the end of October. Otherwise, thank you and we'll be in touch.

And thanks, Paul.

Thanks all for attending.