Highlights

  • ikeGPS increased half-year platform subscription revenue by 22% to about NZD 11 million.
  • The company lifted gross margin to 81% from 75% a year earlier.
  • Management retained an FY27 exit subscription run-rate growth outlook above 30%.
  • The business targeted three new product launches during H2FY27.

ikeGPS Group (ASX:IKE) provides software that helps utilities and communications companies assess, model and manage distribution infrastructure. Its 23 October 2026 performance update showed subscriptions becoming a larger share of revenue during the six months to September-end. At the same time, the timing of major contracts reduced the company's earlier expectation for recognised FY27 subscription revenue growth.

Subscriptions Carry More of the Revenue Mix

Platform subscription revenue reached approximately NZD 11 million in H1FY27, up 22% from the corresponding period. The annualised exit run rate was about NZD 22 million, an increase of 13% year on year.

Total revenue was approximately NZD 12.7 million, broadly flat, with the detailed presentation showing a 1% decline. Lower-margin, one-off professional services revenue softened, offsetting part of the subscription growth.

Subscriptions represented approximately 85% of total revenue, compared with 69% a year earlier. Professional services revenue fell 61%, while non-recurring hardware and other revenue declined to 7% of the mix from 10%.

Margins Improve as the Mix Changes

Gross profit reached approximately NZD 10.2 million, up 7% year on year. The overall gross margin increased to 81% from 75%, alongside the shift towards the higher-margin subscription business.

Management cited subscription gross margins of around 95%. Seat count rose 11% compared with September 2025, while the reported three-year compound annual growth rate in seats was 31%.

The update also recorded a three-year compound annual growth rate of 29% in the subscription exit run rate and 28% in year-to-date subscription revenue. Those historical measures described expansion already recorded, separately from the outlook for the remainder of FY27.

Contract Timing Changes the Full-Year View

The company maintained its expectation that the subscription exit run rate at 31 March 2027 would grow more than 30% against the preceding comparable period.

However, full-year recognised subscription revenue growth was expected to fall below the approximately 35% previously indicated. Management attributed the change to the timing of closing and recognising several major subscription contracts, with revenue recognised over the subsequent 12 months from execution.

The revised growth forecast was due to be confirmed at the end of November. Management described the change as a recognition-timing issue rather than customer losses or churn, while retaining confidence in revenue flowing into later periods.

Three Products Target New Workflows

New products funded in FY26 remained targeted for market entry during H2FY27. The company expected them to contribute material additional recurring subscription revenue from FY28.

Secondary Voltage Analysis would extend the platform from mechanical and structural analysis into transformer sizing and secondary-voltage assessment. The product was being developed with utility standards teams and designed to connect with the existing structural-analysis platform.

PoleForeman 2.0 would address communications companies deploying fibre. A separate AI-based make-ready engineering platform would automate elements of the work required to design new services and attachments on distribution networks.

Cash Supports Delivery Through the Next Phase

Cash and deposits totalled approximately NZD 27.4 million at 30 September, with net receivables around NZD 3.9 million and no debt. Management said cash was ahead of its internal plan.

The closing balance reflected the timing of a large receivable and a seasonally higher-spending second quarter. Product launches, contract execution and subsequent revenue recognition remained the main delivery items connecting the first-half performance with the retained exit-run-rate outlook.