IQGeo (IQG ), a developer of geospatial software for telecom and utility operators, announced two new large contracts with a tier 1 US telecom provider and a leading German broadband operator.
Both are existing IQGeo or Comsof customers (Comsof is a new subsidiary of IQGeo). The expansion contracts involve the sale of IQGeo's Network Manager Telecom software to be used as the clients' strategic core technology for long-term growth and management of their full fibre and hybrid fibre networks.
The German customer's contract has a total minimum annual contract value of €2m over a 3-year period. The US customer signed a 3-year contract worth US$2m that includes IQGeo cloud hosting services.
The German customer is expanding rapidly with plans to pass 800,000 premises/year with fibre for the next 6 years. IQGeo's product will replace that customer's aging GIS software in supporting the rollout. The US customer has a long relationship with IQGeo that included the deployment of the latter's mobile solution for field crews. The new contract will result in a significant expansion of IQGeo's software footprint as the customer sunsets their legacy GIS, replacing it with IQGeo's Network Manager Telecom.
IQGeo's Network Manager Telecom provides an end-to-end network model that supports full fibre and hybrid fibre-coax technology architectures, consolidating what are typically disconnected network systems into a single unified solution. The flexible design of the software also enables the integration of other data streams to support an entire network lifecycle.
The two new contracts are further evidence of IQGeo's continued successful expansion within its key markets of Europe and the US. The company's aggressive upsell and cross-sell strategy has resulted in sustained growth within the telecom space that is now dominated by at-scale fibre deployments. IQGeo's rapid expansion is reflected in its recent stock performance, with shares up 39% year-to-date and up 90% in the past year. Shares rose 4.1% on today's news.
IQGeo's end markets remain resilient despite current macroeconomic headwinds. The company's most recent exit annual recurring revenue of £15.1m provides strong future revenue and cashflow visibility.
In its most recent final results for FY22 ended 31 Dec 2022, IQGeo reported headline revenue growth of 92% to £26.6m, exceeding market forecast. Organic revenue increased 57% to £21.8m and recurring revenue rose 84% to £10.6m. Recurring revenues now account for 40% of total revenues, with a 108% recurring revenue net retention rate, and £5.3m of new annual recurring revenue added in FY22.
Gross margin was 59%, with a substantially improved adjusted EBITDA profit of £1.9m (FY21: £0.8m loss) and reduced loss for the year of £0.9m (FY21: £1.9m). IQGeo's stellar performance in FY22 allowed it to acquire Comsof for €13.0m. Year-end cash was £8.1m and no debt, after a £7.5m cash outflow for the acquisition of Comsof and a fundraising of £3.5m.
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