In This Article:
Release Date: February 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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EnviroSuite Ltd (ASX:EVS) achieved a positive EBITDA for the first time in the first half of the fiscal year, indicating improved financial performance.
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The company reported a 51% growth in the rolling 12-month pipeline for EVS Industrial, driven by strong validation from Hitachi Construction Machinery's investment.
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EnviroSuite Ltd (ASX:EVS) secured significant deals with NASA and an ANSP in North America, opening new market segments.
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The company's average revenue per site increased, with industrial sites now generating $107,000 per site.
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EnviroSuite Ltd (ASX:EVS) has set a goal to double its Annual Recurring Revenue (ARR) every five years, supported by a clear strategy and focus on core markets.
Negative Points
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Non-recurring revenue decreased by 27% compared to the first half of the previous year due to lower project sales.
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Cash flow remains unpredictable and lumpy, particularly due to the nature of project sales converting to non-recurring revenue.
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The company faced challenges with aged trade payables, which were related to cash constraints in the previous financial period.
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EnviroSuite Ltd (ASX:EVS) continues to face inflationary pressures, impacting operating expenses.
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The demand for certain inventory items has reduced, leading to expectations that slower-moving items will take around 24 months to clear.
Q & A Highlights
Q: What is EnviroSuite's plan and timeline to achieve profitability? A: Emma Deepsik, CFO, stated that EnviroSuite had a positive EBITDA in the first half and expects to maintain this on an annual basis. The company anticipates achieving net profitability by 2027, driven by projected ARR growth and operating leverage improvements.
Q: How was cash utilized during H1, and what changes are expected in H2? A: Emma Deepsik explained that cash in H1 was primarily used for operating activities, including $1.9 million in leased equipment and inventory and $2.9 million in internally developed software. The company also repaid $1.1 million in loans and $1 million in aged trade payables. In H2, seasonal expenses will be reduced, and higher recurring revenue and project sales are expected to positively impact cash flow.
Q: What is EnviroSuite's capital strategy moving forward? A: CEO Jason Cooper mentioned that the company is focused on sales and cost management, with a debt facility in place with Partners for Growth. The company will continue to evaluate options as it evolves but is pleased with the current debt provision, which supports its strategy.