In the wake of the hysteria over the Q receipts while completely ignoring A$1.8M in cash receipts collected for July, I believe the market has got this wrong. Everything stated about the grid resilience/hardening programs for US customers is in the multiples. This isn't just about FPL/Entergy. These are nationally strategic US-wide utility power network upgrades endorsed and financially supported with grants by the Whitehouse.
Pointerra's entire focus is now at enterprise level. In time, the Entergy win on its own will prove to be a defining moment for Pointerra - probably company-making. That's without taking into account all the other enterprise-grade verticals they are involved in - including but not limited to the expansion of the 3+ year partnership with Jacobs.
Expected to revert to cashflow positive Q1 FY24 and beyond.
A$1.8 million cash collected during month of July 2023.
Australian large enterprise customer annual renewals complete.
Delivery of the new, innovative Quick Load pole engineering tool has further extended Pointerra3D’s power distribution analytics capability into the strategically important grid resilience and hardening programs being undertaken by a growing number of US energy utilities.
These programs are large, multi-year undertakings and the use of Pointerra3D is delivering material savings in both time and cost, allowing utilities and their EPC contractors to meet program timetables in a time of limited people and materials resources.
Q2 R&D Update – Customer Facing Enhancements
Continued focus on enterprise-grade platform enhancements.
Many enhancements to the Utility Explorer application to support upcoming acceleration of usage from electrical utility customers undertaking large scale pole hardening programs.
Next Generation Poles and Wires analytics now released to customers. This provides a step-change in scalability for storing and viewing electrical utility analytics, supporting unlimited size datasets via dynamic tiling and loading strategies.
Interesting to review the Utility Update in the Jan Q (Hindsight):
Pointerra continued to scale deployment with the Company’s largest Power Utility customer, Florida Power and Light (FPL). The journey to enterprise-wide deployment with FPL provides a valuable blueprint for scaling across other Investor-Owned Utilities (IOU’s) in the US.
The journey to technical and commercial maturity has equipped the team with a clear pathway for engaging, securing, onboarding and growing IOUs in the US market. This proven process is being applied to accelerate onboarding and growth with customers and prospects within the US power utility market and coupled with existing customer advocacy by FPL, will result in faster and lower cost of customer acquisition as the business continues to scale across the sector.
During the quarter the US Utilities team met with Senior Executives from FPL and Entergy to demonstrate the value and capability of Pointerra3D to support planning and prioritisation for essential electric utility grid resilience (hardening) programs.
Entergy are planning a 10 year, US$10B program to improve the ability of their network to withstand the impact of major weather events. The FPL program of grid hardening is widely regarded as best practice and relies heavily on Pointerra3D as a mechanism to identify highest risk areas and determine priorities for pole replacement activities.
The Entergy contract was via a competitive tender process. While already having a relationship with Entergy, Pointerra made a strategic decision to partner with its EPC partners to bid for the very large grid resilience work packages.
Pointerra and their EPC partners won. This isn't some insignificant achievement by a piss-ant Australian wannabe. FPL is widely regarded as best practice, relying heavily on Pointerra3D. There are many eyes on Pointerra as a result.
The market loved the Entergy win, bidding it up to mid-20 cents. The Q took the wind out of its sails. What happens when cash receipts rebound, Entergy starts to wash its face and more enterprise wins are delivered?
I remain bullish about growth prospects going forward.
Not advice. IMHO.
3DP Price at posting:
11.5¢ Sentiment: Buy Disclosure: Held
