Envirosuite scales up across its global pipeline as annual recurring revenues approach $50m, shares climb
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The group’s December quarter update showed it’s beating expectations across the board as it scales up to meet demand for environmental monitoring solutions.
Environmental technology company Envirosuite (ASX:EVS) released a trading update this morning, where it confirmed strong momentum across all of its key verticals heading into the second half of FY22.
Highlighting the recent strength in its operating model, EVS booked new sales of $4.6m in the December quarter – a q/q record which included $1.8m of annual recurring revenues.
The contribution to recurring revenues was spread across each of the company’s three key verticals – Aviation, Omnis and Water.
And investors responded positively to the announcement, sending EVS shares up by around 5% in morning trade to 22.5c.
The company’s EVS Omnis product suite was the biggest contributor to recurring revenue growth with a gain of $1.3m.
Omnis is EVS’s environmental monitoring solution for mining and industrial clients and continues to be a key growth driver due it’s applicability across a broad range of use cases.
EVS has established a strong operating relationship with the Cerrejon mine project in Colombia, which is one of the largest open-cut mines in the world.
The EVS platform is now firmly integrated within Cerrejon’s operations, contributing more than $1m of sales including ARR.
Other notable client wins include Gina Rinehart’s Roy Hill project in Australia, as well as the NYSE-listed Teck Resources.
The company also secured a new client win with Byers Scientific, a leading emissions analysis platform that gives EVS access to the multi-billion dollar US cannabis industry.
Strong momentum in this division continued in the December quarter, where EVS doubled its ARR from $100,000 to $200,000.
The group’s water division is accessing a strong global pipeline of new growth opportunities, driven by a leading presence in the Asia-Pacific region.
During the quarter, Envirosuite was awarded the highly recognised Frost & Sullivan’s 2021 Global Digital Twin Technology for Water Entrepreneurial Company of the Year.
The company also onboarded the first desalination plant for its EVS Water Plant Optimiser, which leverages the ‘digital twin’ technology for efficient water management and opens up a broader global market, with approximately 15,000 desalination plants in operation globally.
As a gauge of the market interest in this division, EVS Water was the focus of a $10.5m share placement in December which was joint-led by Wilsons Corporate Finance Limited and Bell Potter Securities.
Strategic growth momentum
Along with new client wins, EVS also strengthened its existing client base and partnerships heading into the end of 2021.
Most notably, the company signed two strategic partnerships with global engineering firm GHD Group, to support the scale up of the EVS water platform through GHD’s global referral network.
EVS also extended its long-term partnership with Madrid City Council in Spain, where it provides noise monitoring solutions to effectively manage and mitigate traffic and industrial noise.
And the company signed a five-year contract renewal with Airservices Australia, extending a 20-year relationship for the provision of independent aviation noise monitoring for Australian airports.
Rounding out a strong quarter, EVS moved to strengthen the quality of its executive team with the high-profile addition of Aaron Lapsley as chief operating officer.
Based in the US, Lapsley will report to Envirosuite CEO Jason Cooper and remain based in the Americas region where he will actively drive competitive advantage of the global operations team and support opportunities in the company’s largest and fastest growing target market.
For Cooper, the December quarter was further proof of EVS’ ability to execute on a global growth strategy while navigating the challenges of the COVID-19 pandemic.
“It’s exciting to see EVS Water continue to prove product market fit with the addition of a desalination plant in Asia, while EVS Omnis continues to expand into adjacent industries such as cannabis showing the applicability of capability across sectors, and our EVS Aviation customers showing confidence in our product with multi-year renewals,” he said.
Heading into an exciting year of growth in 2022, Cooper said the company will be focused on meeting the growing need for environmental solutions, with a leading executive team and expanded sales division to pursue further revenue opportunities.