REG - IQGeo Group PLC - Trading Update

IQGeoAnnouncement

15/01/2024 07:00

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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 £44.2 million (2022: £26.6 million) representing
growth of 66% (organic growth of 56%)

·     Exit ARR* of c.£21.1 million representing an increase of c.40%
(2022: £15.1 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.£56.9 million representing over 40%
growth (2022: £41.0 million)

·      Gross profit margin of c.60% (2022: 59%)

·      Adjusted EBITDA*** to exceed £6.4 million (2022: £1.9 million),
representing 237% growth

·      Free cash flow positive (2022: negative) with net cash of £11.0
million at 31 December (2022: £8.1 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 £44.2 million (2022: £26.6m)
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 £21.1 million representing growth of 50%
on a constant currency basis (2022: £15.1 million being £14.1 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 £6.4 million (2022: £1.9 million, 2021: loss of £0.8 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 £11.0 million
(£8.1 million as at 31 December 2022), after having settled the first
earn-out related to the Comsof acquisition (€1.5 million) in April 2023.
The second and final earn-out of €1.5 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 £56.9 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/ (http://www.iqgeo.com/)

 

 Copyright © 2024, IQGeo UK Limited. IQGeo is a registered ® trademark

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