ikeGPS Surges 48% in Subscription Revenue, Rejects $170m Takeover Bid

Strong Subscription Growth Drives Financial Momentum

ikeGPS Group Limited (ASX: IKE) has delivered a compelling performance update for the quarter and full year ending 31 March 2025, underscoring its accelerating growth trajectory in the enterprise software sector. The company’s annual platform subscription revenue exit run rate surged 48% year-on-year to NZ$17.6 million, reflecting strong demand for its PoleOS™ platform among electric utilities and engineering service providers.

Total recognized revenue for FY25 reached NZ$25.2 million, a 19% increase over the prior corresponding period, supported by a 34% rise in subscription revenue to NZ$14.4 million. This revenue mix shift towards higher-margin subscription software products lifted gross margin to a robust 69%, up from 60% the previous year, highlighting improved profitability and operational leverage.

Major Contract Wins Cement Market Position

The fourth quarter saw approximately NZ$12 million in contracts closed, including multi-year agreements with two additional major U.S. investor-owned electric utilities. Notably, one contract involves the third largest electric utility in North America, adding over 700 engineers to the PoleForeman user base. These wins contribute an estimated NZ$1 million per annum in incremental annual recurring revenue (ARR), reinforcing ikeGPS’s foothold in a market where eight of the ten largest U.S. electric utilities now standardize on its software.

Subscription seat licenses have more than doubled year-on-year, reaching over 8,500, a testament to both new customer acquisitions and upselling existing clients onto the new PoleForeman platform launched in late 2023. The company’s ability to maintain customer stickiness and expand usage bodes well for sustained ARR growth, which management forecasts to continue at 35% or greater in FY26.

Balance Sheet Strength and Strategic Decisions

ikeGPS’s balance sheet remains solid, with total cash and net receivables increasing by NZ$1.8 million during the quarter to NZ$15.4 million, comprising NZ$10.3 million in cash and NZ$5.1 million in net receivables. The company operates debt-free, enabling ongoing investment in product innovation and market expansion without financial strain.

During the quarter, ikeGPS received an unsolicited, non-binding acquisition approach valuing the company at approximately NZ$1.00 per share, or NZ$165-170 million enterprise value, a 62% premium to the share price at the time. However, after confidential consultations with key shareholders, the Board concluded the offer lacked sufficient support to proceed and ceased discussions, opting to focus on organic growth and shareholder value creation.

Outlook: Capitalizing on North American Tailwinds

Looking ahead, ikeGPS is well positioned to capitalize on favorable macro-market dynamics in North America, where infrastructure modernization and grid resiliency initiatives are driving demand for advanced distribution network design software. The company’s ongoing product development pipeline, including five new products under construction, and a sales cadence of over one new customer per week, underpin a confident outlook for continued ARR expansion and margin improvement.

While some legacy PoleForeman customers did not transition to the new platform following discontinuation of the legacy application, management expects gradual re-adoption aligned with project and budgeting cycles. Overall, ikeGPS’s strategic focus on subscription-based revenue and high-margin software solutions sets a clear path for sustainable growth in a competitive market.