Research company IKE Group [ASX:IKE] has posted a 93% increase in revenue on pcp (on the previous corresponding period), with the total of $30.8 million in revenue earned between March 2022-March 2023.
The update revealed a $6 million lead on internal budgets at the beginning of the financial year and surpassed analysts’ expectations.
The group’s gross margin also rose by 67% on pcp and earned a gross margin percentage of 53%.
Today, the group gave a commentary on that performance and speculated on 2024.
IKE has slipped nearly 10% in the year so far, having dipped below the wider market more recently:
Source: TradingView
IKE posts strong growth in FY23
IKE stated its gross margin was around $16.4 million. Enterprise customer platform subscriptions went up by 19%, and subscription revenue increased 57% from $5.6 million to $8.8 million.
IKE CEO Glenn Milnes commented on the year’s performance:
‘The FY23 period saw continued strong momentum across IKE. We have achieved very significant revenue and gross margin growth and have closed the period materially ahead of all internal stretch targets.
‘Our balance sheet remains extremely strong, noting that the USD and AUD fx rates impact our reported NZD position each quarter. Operating leverage is evident via the scalability of our software products and our disciplined approach to managing operating expenses.’
The group reported that its total cash and receivables at the end of the March quarter were at $23.2 million, which was made up of $18 million in cash and $5.2 million in receivables, with payables of $2.3 million.
IKE did not count any outstanding debt for the quarter or for the year.
Source: IKE
IKE speculates on 2024
The research company believes that with strength in its pipeline, and its high sales in Q4 (including winning a new enterprise customer each week), it should be able to continue strong into the next financial year.
However, Mr Milnes says that incoming monies might be lower than this year, even if tailwinds overall point towards a positive trajectory in the US.
Milnes concluded:
‘We expect growth to continue in FY24, noting the potential for Q1 FY24 transaction revenue to be below the Q4 FY23 run rate because of the engineering practices of utilities in certain territories where one or two larger IKE customers are building fiber networks.
‘Macro-market tailwinds across North America remain highly supportive, driven by the multi-year investment being made into building overhead fiber networks, and additively, the forecasted $300B investment by electric utilities into building & maintaining distribution network capacity and associated network hardening.’
The group said that in order to meet carbon-zero targets in the US by 2050, analysts forecast that the approximately 50% of the energy in the US needs to be on the electrical grid. Today this sits at just 20%.
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