TIDMIQG
RNS Number : 6141Z
IQGeo Group PLC
15 January 2024
15 January 2024
IQGeo Group plc
(the "Company" or the "Group")
Trading update
IQGeo Group plc (AIM: IQG), a leading developer of geospatial
productivity and collaboration software for telecoms and utility
network operators, is pleased to announce an update on the Group's
trading for the year ended 31 December 2023, ahead of the release
of its audited final results in March 2024.
The Group is pleased to report that it expects results to be
ahead of expectations, demonstrating sustained and strong growth
and momentum across all key metrics, underpinning confidence in
further improvement and growth in the current financial year and
beyond.
Highlights:
-- Revenue to exceed GBP44.2 million (2022: GBP26.6 million)
representing growth of 66% (organic growth of 56%)
-- Exit ARR* of c.GBP21.1 million representing an increase of
c.40% (2022: GBP15.1 million) (50% on a constant currency
basis)
-- Net retention** for the period of c.132% (2022: 108%) on a constant currency basis
-- Record order intake of c.GBP56.9 million representing over
40% growth (2022: GBP41.0 million)
-- Gross profit margin of c.60% (2022: 59%)
-- Adjusted EBITDA*** to exceed GBP6.4 million (2022: GBP1.9
million), representing 237% growth
-- Free cash flow positive (2022: negative) with net cash of
GBP11.0 million at 31 December (2022: GBP8.1 million)
2023 Financial Performance:
The Group expects to report growth for the year ending 31
December 2023 across all key metrics comfortably ahead of current
market expectations.
Revenue for the year is expected to exceed GBP44.2 million
(2022: GBP26.6m) representing 66% growth and 56% organic growth.
The Group has achieved continued success in increasing its
recurring revenue base with Exit ARR* as at 31 December 2023 of
approximately GBP21.1 million representing growth of 50% on a
constant currency basis (2022: GBP15.1 million being GBP14.1
million on a constant currency basis). ARR intake during 2023
includes a North American tier 1 telecom operator and a tier 1
utility, as well as a significant new tier 1 national utility and
broadband operator in Southern Europe, as well as growth within
existing customer relationships, as demonstrated by Net Retention**
of c.132%, underscoring the success of the Group's land and expand
strategy.
Gross margins will be approximately 60% (2022: 59%) and the
considerable operational gearing within the Group means the revenue
growth delivered translates to a substantial level of adjusted
EBITDA*** growth which will exceed GBP6.4 million (2022: GBP1.9
million, 2021: loss of GBP0.8 million). This has been achieved
whilst continuing significant investment in the Group's global
operational, sales and marketing capabilities.
The Group expects to report net cash as at 31 December 2023 of
GBP11.0 million (GBP8.1 million as at 31 December 2022), after
having settled the first earn-out related to the Comsof acquisition
(EUR1.5 million) in April 2023. The second and final earn-out of
EUR1.5 million will be paid in 2024.
Outlook
The growth in exit ARR* of 50% in 2023, combined with a strong
pipeline and underpinned by the record order intake of GBP56.9
million, further acceleration in the growth of recurring revenue
growth in 2024 and combined with stable growth in services
revenues, will lead to increasing operational gearing and
margins.
Gross margins are expected to improve in coming periods as more
high margin recurring revenue is recognised. The Group continues to
focus on growing recurring revenue with its "Editions" strategy,
which provides a flexible solution dependent on the demands and
budgets of various sized customers and is proving successful in
broadening the Group's customer base with solutions with lower
associated implementation and service costs.
IQGeo's growth is underpinned by strong momentum in our two key
verticals: Telecoms and Utilities. Record growth in the rollout of
fibre networks is being driven by commercial broadband operators
competing for market share and by national and local governments
seeking to provide universal broadband services. In parallel,
electric utilities are making major investments to redesign and
modernise their grids for renewable and distributed energy
generation and to meet government targets for net-zero carbon
emissions. With these global megatrends set to continue for the
coming decade, they provide a strong long-term market opportunity
for IQGeo's network management solutions.
Richard Petti, CEO, commented that: "I am delighted with our
performance in 2023. We have delivered a very strong set of results
and at the same time we have strengthened both our product
competitiveness and our organisation.
On 1 January 2024 we celebrated our 5-year anniversary as IQGeo
over which time we've delivered two successful acquisitions and
dramatically reshaped our software technology portfolio and global
presence. Our Integrated Network solution is now well established
as a market leader in the telecom industry, and we are building
similar momentum in the electric utility industry for our Adaptive
Grid solution.
Our record order intake, strong growth in exit ARR* and more
than three-fold growth in adjusted EBITDA*** demonstrate the
strength of our proposition, our position in our chosen markets and
the innovation of our technology. Our future is underpinned by
global megatrends that will deliver long-term sustainable growth in
our end markets for the next decade and beyond.
I would like to acknowledge the hard work and commitment of the
IQGeo team that performed so well in 2023 and we look forward to an
exciting 2024."
* Exit ARR is defined as the current go forward run rate of
annually renewable subscription and M&S agreements.
** Net Retention is Recurring Revenue Net Retention defined as
the growth in recurring revenue from customers at the start of the
financial period to the end of the financial period, net of any
recurring revenue churn
***Adjusted EBITDA excludes amortisation, depreciation, share
option expense, foreign exchange gains/losses on intercompany
trading balances and non-recurring items and is reported as it
reflects the performance of the Group
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 which is part of UK law by virtue of
the European Union (withdrawal) Act 2018. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
For further information contact:
IQGeo Group plc +44 1223 606655
Richard Petti
Haywood Chapman
Cavendish Capital Markets Limited +44 20 7220 0500
Henrik Persson, Seamus Fricker (Corporate Finance)
Tim Redfern (ECM)
Notes to Editors
About IQGeo
Telecommunication, fiber, and utility operators are "Building
better networks" with IQGeo's award-winning network management
software. The ability to powerfully model any network requirement,
integrate every system and data source, and support field and
office teams with continual innovation is helping operators create
the networks of the future. Our solutions ensure greater cross-team
collaboration and process efficiency throughout the network
lifecycle, from planning and design to construction, operations,
and sales.
Whether it's highly competitive fiber and 5G broadband rollouts
or complex utility grid modernization projects, customers trust
IQGeo's Integrated Network and Adaptive Grid solutions. We partner
with large multinationals and smaller regional operators to deliver
the digital innovation they need to accelerate time-to-revenue,
increase network resilience, improve operational safety, and
deliver ROI.
For more information visit: www.iqgeo.com/
Copyright (c) 2024, IQGeo UK Limited. IQGeo is a registered (R)
trademark
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END
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