ikeGPS Posts 29% Subscription Revenue Growth, Reaffirms FY26 Guidance
ikeGPS reports a robust 29% increase in annual platform subscription revenue exit run rate for 1Q FY26, reiterating strong FY26 growth guidance and securing A$18 million in fresh capital to fuel expansion and new product development.
- 29% year-on-year growth in annual platform subscription revenue exit run rate
- Total revenue up 12% to NZ$6.4 million with gross margin improving to 76%
- Reaffirmed FY26 guidance for ~35%+ platform subscription revenue growth and EBITDA breakeven in H2
- Completed fully underwritten A$18 million placement to fund growth and product innovation
- FX headwinds and customer contract shifts impacted reported revenue but long-term outlook remains positive
Strong Subscription Momentum Despite Currency Headwinds
ikeGPS Group Limited (ASX – IKE) has delivered a solid start to FY26, reporting a 29% increase in its annual platform subscription revenue exit run rate to NZ$16.6 million for the quarter ended June 30, 2025. This growth underscores the company’s accelerating shift towards its high-margin subscription software model, which now dominates its revenue mix.
Overall revenue rose 12% year-on-year to NZ$6.4 million, supported by a 28% increase in subscription revenue to NZ$4.1 million. Gross margin improved notably to 76%, up from 70% in the prior corresponding period, reflecting the favorable revenue mix transition away from lower-margin hardware and transaction services.
Guidance Reaffirmed and Capital Raised for Expansion
ikeGPS reaffirmed its FY26 guidance, targeting approximately 35% or greater growth in platform subscription revenue and expecting to reach EBITDA breakeven on a run-rate basis in the second half of the year. This confidence is bolstered by a fully underwritten institutional placement completed in July, raising A$18 million (NZ$19.6 million) to accelerate growth initiatives and new product development.
CEO Glenn Milnes highlighted that the company is leveraging its recent success with the IKE PoleForeman product to develop two new subscription modules aimed at the North American electric utility market. These next-generation offerings are designed to deliver significant productivity gains and enhanced value-based pricing, positioning ikeGPS as a market leader for the coming decade.
Navigating FX Impact and Customer Contract Transitions
Despite the positive momentum, ikeGPS faced headwinds from foreign exchange fluctuations, with the NZ dollar weakening approximately 7.5% against the US dollar during the quarter. This currency movement effectively reduced reported subscription revenue by around NZ$1.3 million. Additionally, shifts in customer contracts, including a national engineering group transitioning to a transaction-based model and a tier-1 fiber customer completing a major project, contributed to some revenue volatility.
Nevertheless, these customers remain engaged, and the company expects transaction revenues to build over the medium to long term, supporting recurring revenue growth alongside subscriptions.
Positioned for Long-Term Growth in a Supportive Market
ikeGPS’s focus on subscription seat growth, which increased 45% year-on-year, and its expanding customer base, adding 22 new subscription customers in the quarter, reflects strong market demand. The company’s strategic emphasis on North America, where infrastructure digitization is a growing imperative, aligns with broader macroeconomic tailwinds expected to sustain growth for years to come.
With a healthy cash position of NZ$8.8 million and no debt, ikeGPS is well-funded to execute its growth strategy and capitalize on emerging opportunities in the electric utility and communications sectors.
Bottom Line?
As ikeGPS invests in next-gen products and navigates currency challenges, its FY26 trajectory signals a pivotal year for market leadership and profitability.
Questions in the middle?
- How will the new subscription modules impact revenue and customer retention in FY27 and beyond?
- What strategies will ikeGPS employ to mitigate ongoing foreign exchange volatility?
- Can transaction revenue growth offset subscription seat fluctuations from large customers?
