1Spatial - Two recent wins highlight US potential

Spatial’s two recent wins in the United States highlight the potential for the business to deliver significant, high-margin recurring revenue growth in the world’s largest market. We are not changing our estimates at this stage, but the repeatable nature of both deals indicates there should be more to come and we believe there is upside potential to our estimates for FY23 and FY24. We believe the current ratings of FY23e EV/sales of 1.4x and FY24e P/E of 17x does not reflect the company’s long-term earnings potential or its increasingly strategic position in the geospatial software industry, which is expected to grow at a sustained double-digit rate.