Pointerra: Annual Contract Value of US$5.82m, +18%
Pointerra
Annual Contract Value of US$5.82m, +18%
Pointerra Ltd (ASX:3DP) provides an end to end, cloud-based data as a service solution for capturing, storing, manipulating and analysing massive 3D datasets in the geospatial sector. It has taken what has been a highly manual, slow and cost prohibitive process and turned it into a fast, efficient workflow solution for 3D data, enabling digital asset management from any device in any location. Its customer base spans pole and power companies, resources companies, construction companies, government agencies, data capture companies and surveyor and mapping companies. It generates income from subscriptions to host and provide access to data (data as a service), to process the huge data sets (data processing as a service) and increasingly from analysing the data (analytics as a service). With expanded datasets on its platform, Pointerra is now partnering with its customers to create a data marketplace which delivers additional revenue and customer opportunities to the group. The company has announced today that since last reporting Annual Contract Value on 15 October, this measure had grown 18% to US$5.82m from US$4.93m. To put this into context, we are forecasting for Pointerra to end H1 FY21 with ACV of US$6.37m.
Business model
Pointerra offers a suite of Software as a Service (SaaS) products to its clients: Data as a Service (DaaS), Analytics as a Service (AaaS), and Data Processing as a Service (DPaaS). Pointerra’s DaaS offering manages 3D data using its digital management platform and is priced according to the amount of data (in terabytes) that Pointerra hosts on behalf of the client, and the number of users required. Additional revenue is generated from processing client data (DPaaS) and building and/or deploying analytics tools (AaaS) to interpret the client’s 3D data. Pointerra has also recently soft-launched its 3D data marketplace which aims to sell insights into assets condition though subscription- and event-based models.
Annual Contract Value tracking in line with expectations
Pointerra has announced that its ACV is US$5.82m, up 18% since last reporting ACV on 15 October. ACV has almost doubled since June 30, when the company reported it at US$2.87m. To put it into context, we are forecasting ACV to be US$6.37m at 31 December 2020, and the company is now just US$0.55m of this. Our modelling has Pointerra with ACV of US$10.22m at June 30, FY21. On our estimates we are expecting 3DP to deliver H2 positive EBITDA of $0.6m following negative EBITDA of $1.2m in H1FY21.
Base case valuation is $0.75/share
We have used the discounted cashflow methodology to value Pointerra using a WACC of 14.0% (beta 1.9, terminal growth rate of 2.2%) and this derives an equity value of $0.75/share. Our terminal value is $0.45/share within this valuation. Our valuation implies a compound annual growth rate (CAGR) in free cashflows 51.9% from FY22-FY30. Having examined comparable business models, which we refer to in our initiation report of 25 November 2020 Sky's the limit, we are of the view that our forecasts are entirely achievable. Please refer to our initiation report for more detail.
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- Pointerra: Annual Contract Value of US$5.82m, +18%26 Nov 2020