Elsight achieves major milestones in Q1 FY22, retains financial position for growth
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Elsight has achieved several key milestones in its business development during H1 FY22 to set the company up for future success.
Unmanned connectivity technology company Elsight (ASX:ELS) has announced it has achieved several key milestones during H1 FY22.
The company has several commercial orders and agreements secured for delivery of its connectivity solution Halo units in several jurisdictions globally.
During the period Elsight participated in multiple industry events where sentiment about the Halo solution and its value to the sector was positive.
Elsight’s Design Win strategy is starting to pay off with 24 new partners added to the group program during H1, bringing the total number of companies working with Elsight to 60.
Under the Design Win strategy Halo is embedded as a critical component in drone design by manufacturers so as they grow so too does Elsight.
The new companies come from a range of regions including Europe, North America, and Southeast Asia along with various industries such as homeland security, logistics and inspection.
In a major milestone in H1 the Design Win strategy converted existing partners into paying companies, beginning with Walmart backed Drone Up in January.
Following the success of drone parcel delivery services, Walmart announced plans to expand the service through their partnership with Drone Up from one US state to six by the end of 2022.
The expansion will have a positive flow on effect to Elsight through its partnership with Drone Up.
Towards the end of H1 Elsight announced a commercial partnership with Spright, the drone division of Air Methods Corporation, a leading provider of airborne medical services in North America.
The primary focus of Air Methods is its air medical division, which provides emergency services to more than 100,000 patients annually across 48 states in the US.
Spright was established to help solve many of the toughest time sensitive challenges facing health services for communities across the US.
Elsight’s Halo platform has been chosen as command and control (C2) reliable link provider on all Spright’s various unmanned aerial vehicles (UAVs), such as the Wingcopter 198 aircraft.
The company also entered several other deals during the period.
The HaaS model was introduced during H1 to better align Elsight’s business model with that of customers by lowering upfront payments while modestly increasing recurring monthly revenue received by the company during the term of Halo use.
The new pricing model enables Elsight’s customers to grow and scale with a smaller upfront cost, improving the company’s recurring revenue and profitability opportunities over time.
HaaS has seen a significant business achievement improving the longevity of ongoing revenues from hardware selling which is typically a one time revenue.
During H1 Elsight introduced Remote-ID (RID) and 5G features to be offered to new and existing partners.
The company has already received its first commercial order for the Halo 5G unit during the half year, expanding its product portfolio and creating growth opportunities with new and existing customers.
RID is a US Federal Aviation Administration (FAA) standard for ‘tail numbers’ for drones that will become a requirement for all drone operators in September 2023.
Elsight believes continuing rollout of 5G, along with tightening airspace regulations, could help accelerate large-scale commercial drone delivery for both business and residential areas.
Net assets of Elsight increased to US$2.9 million during Q1, while its cash and cash equivalents were up to a balance of US$2.2 million.
Net loss decreased to US$2.2 million from US$3.27 million for pcp of June 30, 2021.
During the period Elsight completed a transaction related to the early exercise of founder options which raised $3.35 million.
Funds raised enable Elsight to continue to accelerate the execution of its Design Win strategy and roll out of the Halo technology with commercial partners.
The company has a working capital as of June 30 of US$2.57 million, up from US$2.4 million on December 31, 2021.
This article was developed in collaboration with Elsight, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.