Envirosuite shares jump 10% after Q3 results confirming surging momentum across its global client base
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In a global industry with major tailwinds, Envirosuite’s proprietary environmental technology is building strong revenue growth across each of its core verticals.
Leading envirotech platform Envirosuite (ASX:EVS) has been establishing traction with a global growth strategy focused on the North American market.
And that momentum was confirmed this morning, with a strong Q3 trading update which showed growth in annual recurring revenues (ARR) across each of the company’s three core verticals.
Investors responded positively to the update, sending EVS more than 10% higher in morning trade.
Following more contract wins in the Q3 quarter, the company is now generating ARR of $50m on a constant currency basis, highlighted by continued growth out of the US market where it generated 40% of new ARR contracts.
Highlighting the traction of its product-market fit, EVS also maintained a low churn rate across its customer base of approximately 2%.
Over half of that $50m total was generated by the group’s Aviation division, with another $17m generated through its EVS Omnis platform which serves the Industrial, Mining. Waste and Wastewater sectors.
As a measure of the recent momentum in Envirosuite’s EVS Omnis software, it has consistently delivered over $1m of new ARR growth across all quarters this financial year.
The company also continues to build traction with its new EVS Water division, which has increased ARR in each of the last three quarters and attracted major shareholder interest in EVS’ $10.5m share placement last December.
With its market experience and leading noise monitoring solution, EVS is ideally positioned to benefit from the pickup in airport activity as global travel returns to action.
As flight numbers return towards pre-pandemic levels, the increased prevalence of work-from-home trends has reinforced the importance of effective noise reduction strategies.
In that context, EVS enables customers to meet “critical operational licencing conditions for commercial airports”, the company said.
And its position in the market was further established in the March quarter with two new global contract wins; one in Cincinnati, USA, and a second in Gimhae, Korea, which is managed by the state-owned Korea Airports Corporation (KAC).
With its continued growth in Q3, the increasingly global client base of the EVS Omnis division is a clear demonstration of Envirosuite’s growing importance across international markets.
The EVS Omnis platform has found success across a diversified group of client sectors including mining, industrial, cities, waste and wastewater management, with leading services in areas such as air quality, odour and monitoring dust levels.
The division’s client base includes companies such as the NYSE-listed Teck Resources, which is rolling out the EVS Omnis service to a seventh mine site to manage air quality and dust management.
With its focus on sustainability, Teck is now listed on the Responsible Mining Index as one of the top five global mining companies when it comes to environmental responsibility, EVS said.
Also in the March quarter, EVS added a major Taiwanese manufacturing company to the EVS Omnis platform, a client that is already showing signs of expansion within other markets in which it operates.
Separately, “two departments in the City of Chicago separately signed on for EVS Aviation and EVS Omnis to measure, monitor and manage noise around the airport and odour investigation across the city”, the company said.
With its EVS Water platform, Envirosuite has commercialised a water optimisation product that leverages “unique proprietary algorithms to optimise the high-cost inputs (chemicals and electricity) used in drinking water and desalination treatment facilities, leading to significant savings and lower environmental impact”, the company said.
In conjunction with its other two verticals, the company and its investors view the EVS Water platform as a major growth driver in the years ahead.
As evidence of its early traction, EVS Water’s Q3 highlights included a contract with PUB Singapore, the national water agency that manages Singapore’s water supply chain.
“This is an important endorsement and milestone for EVS Water as it’s a significant deployment by a globally recognised water utility and first mover innovator,” EVS said.
In addition, EVS advanced the commercialisation of its proprietary SeweX platform by procuring a fourth site with Western Australia’s Water Corporation.
And heading into Q4, Envirosuite CEO Jason Cooper said he looks forward to updating the market about more EVS Water developments in the near future.
“EVS Water is an exciting part of our business, particularly as it continues to be recognised as a key digital twin platform by international leaders in the water industry,” Cooper said.
“We’re delighted with the Singapore PUB contract and our expansion with Water Corporation that will enable us to build on the momentum of this product across all global markets.”
This article was developed in collaboration with Envirosuite, 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.