Ann: Q3 FY24 Business Update, page-15

The update reflects continued growth in the business, which we believe is stronger than the overall industry growth reflecting growing market share in seismic data processing and imaging. The top line growth is tracking above our expectations. A small batch ~7% of ordered new compute is now up and running, and the rest will be progressively delivered and set-up over 4Q, which should elevate margins through the next quarter.

We reiterate that any major contract wins can present significant upside risk, as reflected by their Oman customer accounting for 22% of rev (US$12m) in FY23

Key points:

• 3Q rev of US$17.6m up 39% pcp, our current expectation for 2H24 is US$33m.
• EBITDA of US$4.6m up 26% pcp v our expectation of US$9.5m for 2H24.
• Third party compute spend was US$2.6m for the quarter, similar to the US$2.8m spent in 1H24. We note DUG’s new compute should be up and running by the end of 4Q24 and a subsequent margin uplift in FY25.
• US$13.6m new projects were awarded in the quarter, bringing order book to US$43m.
• Focus remains on pursuing “unearthed opportunities” in the Middle East and exploring the “fertile grounds” of India and Brazil, positioning the business to capture market share.