IQGeo Group PLC (AIM:IQG), a leading developer of geospatial productivity and collaboration software for telecoms and utility network operators, has said it expects its full-year results to be ahead of expectations, showing ongoing growth across all key metrics and its first full year of adjusted EBITDA profitability.
In a trading update, for the year ended 31 December 2022, ahead of the release of its final results in March 2023, IQGeo said revenue for the year is expected to be not less than £26mln (2021: £13.8mln), representing strong growth of 88%, including continuing underlying organic growth in the core IQGeo business of around 65% (2021: 51%) at approximately £22.8mln (2021: £13.8mln).
The group said it continues to focus on its transition toward a recurring revenue model. Overall revenue growth has been reflected by an increase in recurring revenue of 81% to approximately £10.5mln (2021: £5.8mln). Exit annual recurring revenue (ARR) as of 31 December 2022 has increased by 83% to approximately £15.0mln (2021: £8.2mln) with recurring revenue net retention at approximately 108% (2021: 113%).
The proportion of revenues represented by project and services has also increased, the company added, in light of the number of customer implementation mandates as the group has expanded its base of customers from 320 to 450 including both organic and through acquisition.
IQGeo said in-year orders have grown by over 90% to £38.0mln (2021: £19.6mln), resulting in a record closing order book of approximately £28.0mln (2021: £14.6mln) to be taken as revenue in future years.
The group said it expects to report adjusted EBITDA of not less than £1.8mln (2021: loss of £0.8mln), whilst continuing its significant investment in capability, headcount and the onboarding of significant new clients to further strengthen its position and take advantage of the market opportunity.
IQGeo said it has benefited at a revenue level from the strengthening of the US dollar throughout the year, however, it has retained a natural hedge from the proportion of costs also denominated in dollars.
The company retains a strong balance sheet, with cash of £8.1mln (no borrowings) at the year-end (2021: £11.5mln) having completed the €13mln acquisition of Comsof during the period.
In the update, Richard Petti, IQGeo CEO said: "I am very pleased to report another year of substantial progress. We have this year expanded our footprint and capabilities both organically and by acquisition, and have improved our position in a rapidly growing market. I am very grateful to our colleagues for their hard work in delivering on this and to our customers for supporting us.
"Given the progress that we have made this year, our capabilities and resources, in addition to the opportunities that we see ahead of us in this market, we enter 2023 with excitement and great optimism for the group. IQGeo's significantly increasing recurring revenues, strong organic growth, growing order book and new customer wins provides the group with a strong platform to ensure continued success and achievement of our ambitions and build on the success of 2022.
"We continue to be excited by the future with the telecom and utility operators that IQGeo supports in the midst of a technological sea change as they continue to rapidly deploy new fibre, 5G, and decarbonised distributed energy networks. Looking forward, IQGeo anticipates there being significant levels of investment in these next-generation networks which renders the group extremely well placed to fulfil and capitalise on the demand for the flexible, scalable geospatial software solution offered by IQGeo."