Envirosuite Limited - FY24 Q4 Sales Update - 25 July 2024
EVS (EVS) Share Update July 2024 Thursday 25th
Envirosuite Limited Reports Strong Q4 Sales and ARR Growth
Envirosuite Limited (ASX: EVS) has reported impressive sales figures for the fourth quarter of FY24, reflecting the company's ongoing growth and market leadership in environmental intelligence technology.
Instant Summary:
- New Sales of $3.8m, including New ARR of $2.1m and Project Sales of $1.7m.
- EVS Industrial drives growth with New ARR of $1.5m.
- Significant multi-year renewal with London Heathrow.
- Total ARR grows 2.9% PCP to $61.1m.
- Company wins back two former customers in the USA.
- Churn over the last twelve months increased slightly to 4.1%.
Q4 Sales Performance
Envirosuite Limited (ASX: EVS) has achieved $3.8 million in new sales for the fourth quarter of FY24, with New ARR (Annual Recurring Revenue) of $2.1 million and Project Sales of $1.7 million. This brings the company's total ARR to $61.1 million, up 2.9% compared to the prior corresponding period (PCP).
Growth Drivers
The company's growth was primarily driven by its EVS Industrial sector, which reported New ARR of $1.5 million. Key wins included a landfill site in New Zealand with Porirua City Council, expanded solutions with a Vale mine and Braskem petrochemical facility in Brazil, and scaling to another BHP mine in Australia.
EVS Aviation also contributed with New ARR of $0.6 million, including expanded solutions with Salzburg Airport in Austria and Dublin Airport in Ireland. A significant multi-year renewal with London Heathrow, one of the world's leading airports, further solidified Envirosuite's market position.
Customer Wins and Renewals
Envirosuite won back two former customers during the quarter: a wastewater treatment plant with the City of Woodland and Charlotte Douglas International Airport in the USA. Additionally, the company re-engaged commercially with a BHP mine in Chile that had ceased using Envirosuite solutions earlier in FY24.
Challenges and Churn
Several construction contracts reached end of life during the quarter, and the solution scope was reduced in some customer renewals due to budget pressures and temporary facility closures. As a result, churn over the last twelve months increased slightly to 4.1%.
The announcement of $3.8 million in new sales and a 2.9% increase in ARR is a positive indicator for Envirosuite's stock. The company's ability to secure significant renewals and win back former customers demonstrates its competitive edge and market value. However, the slight increase in churn and the reduction in solution scope for some customers may temper investor enthusiasm.
Investor Reaction:
Analysts have generally reacted positively to the news, highlighting Envirosuite's strong performance in both the industrial and aviation sectors. The multi-year renewal with London Heathrow is seen as a significant achievement, reinforcing the company's market leadership. Some investors, however, have expressed concerns over the slight increase in churn and the impact of budget pressures on customer renewals.
Conclusion:
Envirosuite Limited's strong Q4 performance and ARR growth underscore its market leadership in environmental intelligence technology. Investors should keep an eye on the company's upcoming FY24 Annual Report and Full Year Results, expected in late August 2024, to assess the long-term impact on their portfolios.