Pointerra Ltd: Annual Contract Value up 40% to US$6.88m
Pointerra Ltd
Annual Contract Value up 40% to US$6.88m
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 that Annual Contract Value (ACV), is US$6.88m at 29 January, which is ahead of our forecast for US$6.37m at the end of Q2 FY21. Pointerra has also reported a better than forecast operating cashflow loss of $0.23m (versus our forecast of a loss of $1.1m), driven by a $0.58m R&D grant and lower than expected operating expenditure. Our DCF valuation remains unchanged at $0.75/share.
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.
Q2 FY21 performance better than forecast
3DP has reported better than expected Q2 FY21 results with an operating cashflow loss of $0.23m (versus our forecast for a loss of $1.1m), driven by tight cost containment on staff and operating costs and receipt of a $0.58m R&D grant. Cash receipts for the quarter were $0.64m, up 4.3% on Q1 FY21 and 243% on Q2 FY20. 3DP ended the quarter with $4.52m cash, compared with $4.89m at the end of Q1 FY21. The company also announced Annual Contract Value (ACV) stands at US$6.88m, an increase of US$1.95m or 40% on ACV at 30 September and up 18% or US$1.06m since last reported on 25 November. Existing customers, new US utilities customers and the US and Australian mapping sectors combined to lift ACV.
Base case DCF valuation is $0.75/share
We use 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.
- Unlock research summaries
- Follow top, independent analysts
- Receive personalised alerts
- Access Analytics, Events and more
Join 55,000+ investors, including top global asset managers overseeing $13+ trillion.
Upgrade later to our paid plans for full-access.
- Pointerra Ltd: Annual Contract Value up 40% to US$6.88m29 Jan 2021