Pointerra Ltd: ACV and Q1 Tracking to Expectations
Pointerra Ltd
ACV and Q1 tracking to expectations
Pointerra Ltd (ASX:3DP) provides a powerful cloud-based solution (Pointerra3D) for managing, visualising, analysing, using and sharing massive 3D point clouds and datasets. 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 – simplifying the complex. The Pointerra3D suite of solutions spans target sectors including survey and mapping; architecture, engineering and construction (AEC); utilities; transport; resources; and defence and intelligence. Pointerra has reported Annual Contract Value (ACV) of US$11.7m at 29 October, up 19% on the ACV of US$9.8m reported on 29 July. Given the second quarter is seasonally the strongest quarter for Pointerra, we are comfortable with our forecast for ACV to be at US$15.4m at the end of January. Pointerra also reported Q1FY22 cash receipts of A$0.98m and noted that it had invoiced but not received an additional A$0.83m of receivables from Q1 activities. Costs for the quarter were A$1.91m, 40% higher than Q4FY21 almost entirely due to employee costs, with the head count rising to 31 in the quarter. Pointerra finished the quarter with A$4.26m cash in hand. We have maintained our forecasts and valuation. Our base case valuation of A$0.90/share is predicated on Pointerra getting to ACV of US$50m by December 2024.
Business model
Pointerra offers a suite of Software as a Service (SaaS) products to its clients: Pointerra3D Core, Analytics & Answers. Pointerra3D Core 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 and building and/or deploying analytics tools (Pointerra3D Analytics & Pointerra3D Answers) to interpret the client’s 3D data. Pointerra has also recently soft- launched its 3D data marketplace which aims to sell insight into assets condition through both subscription and event-based models.
ACV and Q1FY22 result in line with expectations
Pointerra has announced ACV of US$11.7m (A$15.5m) at October 29, up 19% on the ACV reported on July 29 and 137% ahead of same quarter a year ago. This is a strong result, given Q1 is seasonally the slowest quarter for the company due to the US summer. We are comfortable with our forecast for US$15.4m ACV at January end. Pointerra is now seeing broader adoption of its solution beyond US utilities and survey and mapping to all its target sectors with this being driven by the company’s investment in new business development and sales resources. Q1FY22 cash receipts were A$0.98m, up 61% on the same period in FY21. The company noted that it had invoiced for but not received payment for an additional A$0.83m for services provided in Q1. The combined A$1.81m in paid and unpaid receipts is 25% ahead of those reported in Q4FY21 and put the company on track to meet our H1FY22 forecast for A$5.7m in cash receipts. Our earnings forecasts are unchanged.
Base case DCF valuation is A$0.90/share
We use the discounted cashflow methodology to value Pointerra using a WACC of 14.0% (beta 1.8, terminal growth rate of 2.2%) and this derives a base case valuation of A$0.90/share. Our valuation is predicated on ACV reaching US$50m by H1FY25. We have dimensioned an upside case whereby ACV hits US$50m by H1FY24 and this delivers a valuation of A$1.81/share. Further earnings upside can be derived from 3DP’s 3Dinsight.a
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