Asset Vision Co Limited (ASV) Earnings Call Transcript & Summary

Good morning, everyone, and thanks for joining us. FY '26 at Asset Vision was a pretty significant year, but it already feels like a long time ago. FY '27 is well underway. The pipeline continues to grow, and we're seeing opportunities across our 4 verticals. And we're about to add some great new people to our team as we scale. Today, we'll take you through our FY '26 results, but we also want to spend some time showing what Asset Vision has become and where we're heading next. I'm joined by Damian Smith, our Co-Founder and Co-CEO. Welcome, Damian and Vesna Jelesic, our CFO. Welcome, Vesna.

Thank you.

Gareth Thomas, our Head of Brand and Marketing, will also join us, and he'll manage our active Q&A today. [Operator Instructions] Let's get into the highlights. So FY '26 was a year Asset Vision really moved into the scale-up stage. We've got a great product that meets the needs of our customers across a wide variety of asset verticals and FY '26 showed that we could deliver. There are 4 numbers we're really proud of. The first is ARR growth. We increased that by 46% this year, taking it to $6.45 million, creating a great start moving into FY '27. Importantly, that growth came from a healthy mix of new customers, expansion within existing customers and growth across multiple verticals. It wasn't dependent on one large contract or any one part of the market. The second number we're really proud of is our net revenue retention. I know for a number of people that follow us, we reported 99% at the half year, and that's grown to 110% now. So that really came from the expansion across all of our existing customer base and renegotiation of long-term contracts. The third one is cash. We grow, but it's not at any cost. We're still making sure that we're keeping our SaaS metrics strong. You can see our Rule of 40 sits at 55, and that's allowed us on top of our revenue growth to continue to put money in the bank. So we ended the year at $2.35 million in the bank, and we've already grown that to $3.5 million as of yesterday. So a really, really good result. From a customer concentration point of view, the Board has always been very focused on making sure one customer is not too much of our entire business. And we've done a really good job this year of spreading that risk across new customers, and that's moved from 50% down to 35%. And look, I think in the next 12 to 18 months, we'll see that number move into the teens, which really derisks Asset Vision from a customer point of view. Every reporting period, I get asked about pipeline. So we're going to start reporting it every period now. Our pipeline currently sits at $8 million. That's the total of all deals in our pipeline. $4 million of those are qualified. And when we say qualified, we talk about BANT. So our customer has budget. We're talking to the person who has authority to buy. There's a clear need for our product, and there's a time line around the opportunity that's very, very clear. That's not a static number. This presentation was put together late yesterday. There's already been more deals moved into qualified as of this morning. So it's pretty much a dynamic number. But in summary, a great year, and we've got a really good foundation moving into FY '27. Let's talk a little bit more in detail about the numbers. Ves, I might hand over to you.

Yes, no problem. Thanks, Lucas. As Lucas has mentioned, FY '26 was a strong year of recurring revenue growth. But just as importantly, we strengthened the financial foundation and the delivery capability needed to support that growth. As you've seen, we finished the year with annual recurring revenue of $6.45 million, which was a significant step-up from where we started the year. The real story is the quality of that growth. So we're building a larger recurring revenue base, which gives us greater visibility and predictability while creating a stronger foundation for future growth to compound. So we're not simply growing revenue. We're building a more valuable and scalable revenue base. At the same time, we made a deliberate decision to invest ahead of that growth. So you'll see our cost base has increased year-on-year, and that's deliberate. We've chosen to invest ahead of the revenue curve rather than wait for that growth to arrive and to play catch up. So that investment has actually gone into our delivery capability, our technology, our operating platform and importantly, our people, which includes recognizing stronger performance through STI and expanding the LTI participation across the team. So our objective is simple. It's to make sure we have the capacity and the capability to support the scale of the business that we're building. And I think this is really important where the EBITDA result comes in actually. So we haven't maximized short-term EBITDA at the expense of this growth. We've deliberately invested in the capability required to support the next phase of that recurring revenue growth. And despite that investment, we're pleased to say that EBITDA has remained broadly stable at around $660,000. So that's actually a really good outcome. We've grown the business significantly. We've invested in the infrastructure and capability around it, and we still maintained a broadly stable operating result. You can also see that discipline in our operating metrics down the side with licensing gross margin remaining or staying at 73%. So for us, these numbers just aren't things we watch from 1 year to the next, they're things that we're actively managing as we build the capacity of the business. As we scale, we want to maintain the economics of the model we're continuing to invest in the areas that create growth. And then there's the balance sheet. As Lucas mentioned, and as you can see, we finished the year with $2.35 million in cash. So we're entering FY '27 with much more financial capacity as well as that larger recurring revenue base. So for me, the way I'd characterize FY '26 is pretty simple. We grew, we invested and we actually maintained discipline. We now have a larger ARR revenue or ARR base. We have greater delivery capability, a stronger operating platform and a healthy balance sheet. So the real significance of FY '26 is that we've built the capacity to support the growth that we've already delivered, and we're now in a stronger position to scale that recurring revenue base further. So really put simply, we grew, we invested. We didn't sacrifice discipline. We have financial capacity, and now we're better positioned to scale from here.

I might move to the next slide. Thanks, Gareth. So our vision and mission, these are 2 really important statements. I'll talk to the vision and Damian can talk to the mission. You can see on the left-hand side, we do have global aspirations, but that doesn't mean we're going to rush offshore and start selling software straight away. Right now, just for context, what a global leader means for us is that when a large Australian government asset owner or their maintainers go to market for a solution, we are considered in the same way that they consider the large global leaders like SAP, IBM, ServiceNow or Hexagon. That's where we see being a global leader right now. It's being compared to the global leaders when we're competing in Australia. Damian, do you want to touch on mission?

Yes. Thanks, Lucas, and good morning, and welcome to everyone who's tuned in. Our mission is, as I said, to make asset management easy and more collaborative by building a platform teams love to use every day. That is the mission. It's been the mission since the company was founded. We build software that has a purpose. It solves genuine problems, which people actually want to come and use. Our customers will pay us money to use it. They'll rely on it. They'll depend on it every day because it makes their life easier. And this doesn't just create a great product and customers for life, but it helps provide great reference sites for us, case studies, testimonials and this, in turn, attracts new clients. I mean we've got customers that advocate for us during reference checks and tender assessments. They want to tell their peers about how successful they've been working with Asset Vision. It's a really important mission from many angles, and we'll continue to carry it out.

Great. Thanks, Damian. We'll move to the next slide on our verticals. So during FY '26, we reorganized the business around 4 key verticals: our core verticals, which are transport and civic and community, where we have a great customer base already. And then we've added some emerging markets, which is the utilities vertical and the social infrastructure vertical. When thinking about social infrastructure, think about public housing, schools, hospitals, they are the kinds of organizations that sit within that vertical. This structure has given us much clearer accountability for both growth and delivery with strong leaders now driving each vertical. Ritchie Taylor has joined us as Head of Transport, bringing significant industry experience from Downer, where he was involved in delivering some of Australia's largest road maintenance contracts. James Esson has taken on the role of Head of Civic and Community. James has been pivotal to our recent growth and is already building on that momentum in FY '27. James brings experience running assets at the City of Gold Coast, but also has a background of working with one of our major competitors. Chris Wignall, who has taken -- has played a major role in growing our business as Head of Sales has moved into the role of Head of Emerging Markets, and Chris is focused on scaling our utilities and social infrastructure verticals where we see significant long-term potential. Transport and Civic and Community remain our strongest and most established markets and both continued to grow strongly in FY '26. In Transport, we added the Tasmanian State Road Authority and Marine and Safety Tasmania, and we also continued expanding across major transport contractors, recently implementing Asset Vision across 3 Victorian road maintenance contracts. In Civic and Community, we added 10 councils across 4 states, giving us a strong and increasingly valuable base of reference customers. Utilities and social infrastructure are newer verticals for us, but we're already seeing genuine traction. Westernport Water is an important utilities win and a reference site, while Homes New South Wales gives us a significant presence in social infrastructure. Just last Friday, we also signed a Tasmanian education provider with Asset Vision being rolled out to 38 schools across Tasmania. The strength of this model is that the same core platform supports all 4 verticals. What changes is the industry expertise, the use cases and how we take the product to market. That gives the benefit of real market focus without the cost and complexity of maintaining 4 separate products. Let's talk about our customers in a little detail. So our customers are predominantly state and local government asset owners and the organizations responsible for maintaining those assets. Enterprise asset management systems are operationally critical and become the customer system of record for its assets. Once Asset Vision is embedded in its day-to-day operations, those relationships tend to be long and very stable. Down the right-hand side, we talk about why we win, and it's a pretty simple statement, but our customers love us. And as Damian mentioned, they regularly provide references and support us through competitive tender processes. And without strong customer references, you simply don't win major government contracts, and we've done that really well. I think a recent tender we went for, we had 8 customer references. And I'd like to find probably a number of competitors that we have finding 8 referenceable customers. So we're really proud of that. Look, there are a number of reasons why we win because platform is easy to use. It's fast to deploy and cost effective to deploy. But I think one of the big things about today is we're Australian-based. We understand our customers. And Damian and his team are improving the product on a weekly basis, not a yearly basis as some of the competitors that we compete against. Damian, I might throw to you to talk about the product in a little bit more detail.

Yes. Sure thing. Next slide, please. Okay. So Asset Vision, it's an EAM or Enterprise Asset Management system for everyone that doesn't know. And it's for -- we have clients in essential infrastructure. So these are clients that are owners or maintainers of roads, bridges, footpaths, buildings, parks, ports, water utilities now, airports. And so when you own assets of that scale, you generally -- you will need something like an EAM to track, inspect and manage these assets over their life cycle. And you will also generally outsource or award maintenance contracts to service providers to help you look after those assets. So that's a real big differentiator for us. That's one way our platform goes further than most traditional EAMs is that we actually connect the asset owners, service providers, subcontractors all together on the one platform as a single source of truth. Traditionally, they all use their own systems and really, it's a struggle to share data. The vast majority of our users are out in the field using our app, which has been built from the ground up to be easy to use and reliable so that they can just focus on the job at hand rather than the technology. And so yes, we're really focused on connecting all teams to the platform. And as AV has been around for a while now, it is quite mature. It's got broad functionality to support our target verticals like Lucas was saying. And our clients use it to collect a lot of asset and operational data. And so we're sort of seeing ourselves move into a phase of really starting to empower our clients to turn that data into actionable insights. And I'll talk a little bit about that in a minute. Next slide, please. So AutoPilot, it's -- yes, we are an EAM. However, we've got a strong history in helping transport clients. So that means we develop innovative solutions beyond a typical EAM along the way. So AutoPilot, the way it works is road inspectors are out there driving the road network, and we get them to mount their iPhone on the dash. There's no additional special camera set up or anything. It's just using a standard smartphone. It captures the photos of the road network as they're driving and tracks their inspections and makes sure that they're driving the extent that they need to drive. And then they can play that back in the office, and we also use AI across these images to identify potential defects. So there's a lot going on there. But first and foremost, it is the safest method of performing a road inspection. We've got clients using AutoPilot in nearly every state now in Australia. And more recently, we were invited by NTRO and Main Roads WA to participate in a trial across metro and regional WA. And Lucas volunteered to hit the road and got to spend a lot of time with the people on the ground in WA, which we think was invaluable. And I also joined for the last leg, and it was great to get out there. And just before the WA trial, we actually finished off our new ride quality feature, which you can see pictured on the screen here. And this uses the accelerometer of the phone that's already there to capture movement and then we sort of present it back to the user to review, as you can see here. And so it sort of shows the bumps and the smoothness of the road. And that was great to get out there and field-test it on some of those unsealed roads in the region in WA. Grab that next slide, thanks. And we've been looking into this capability for some time. So AI platforms have quickly become a really important part of our professional and personal lives. It's quite easy to pick up a ChatGPT or a Claude or a Copilot and ask it questions and get those answers. And so given that AV is a wealth of data, and it just is a great platform for capturing data. And while we do have our dashboards and our predefined reports and all of our reporting warehouse options for clients to build their own reports, there really is no faster way to get answers than simply asking something like a ChatGPT, a question and getting an answer a couple of seconds later. So I think we've all experienced the joy of asking those questions and getting some heavy lifting done. So it was a no-brainer to connect AV to these platforms, which we're now connected in their marketplaces. So that is ChatGPT, Claude AI and Microsoft 365 Copilot. And we've got it out with customers now who are just loving it. They're integrating it into their daily practices. And they're finding they're being much more productive. They can focus on more important tasks. So yes, look, we're really excited to see where this goes. We've already got big plans for what's around the corner. And in general, I think there's no secret these AI platforms are really just going to change the way that we all interact with our software systems going forward. And yes, AV is ready for it.

This is a really important slide for us. Our people are a big part of our organization. We've had 3 years where we've had 100% staff retention, and we're really proud of that, and it becomes a real differentiator. Our people as much as our platform are a difference and the longer they stay with us, the more experience they bring and their interaction with our customers become so much stronger. We've put some solid STI and LTI incentives in place and really aligning our team to long-term shareholder value. Over the next 8 weeks, we'll add more members to the team across account management and delivery capabilities. So we'll continue to scale our team so we can ensure that we keep this momentum going. Our values are along the bottom. We've got them up on the wall in the office. They're not just there because we need values, but we actually think they really show how we interact with our customers. We interact with each other, and they're really important piece of fabric of Asset Vision as a whole. So yes, we've had a great year. We're building a great team that's getting bigger, and I think everyone is really excited about the coming year and years. Next slide, please, Gareth. So look, I suppose I'll just sum up our strategy, and it's pretty simple. I think our immediate strategy is just to keep doing what's working, but at greater scale. So our focus is organic growth. It's about winning more customers. It's about expanding in existing accounts, but continuing to invest in the product and AI innovation that delivers real value. We'll prioritize market share and revenue growth, but we'll remain disciplined and we'll make sure that we have strong SaaS fundamentals and most importantly, positive cash generation going forward. The second generation -- sorry, the second horizon, we've kicked off already. So we're already moving into utilities and social infrastructure and moving into new geographies. Over the next 3 months, we will start to have people on the ground in WA. So we'll start to service more and more of the Western side of Australia, which we're starting to see some really good momentum. We've actually got some work going on at the moment looking at international with our strongest capability, which is our transport capability. We're not rushing into it. We're going to go through an exercise to make sure that we think about it in the smartest way and not just try and grow for the sake of growing internationally. So that work is up and running. And then acquisitions, look, they're not front of mind at the moment. But like any acquisition, if the right business came along, we would look and assess that business. But it would be, I suppose, assessed against some key criteria that we have and what we had in -- and we had those criteria in the half year results. Next slide, Gareth. So why Asset Vision? Well, I won't read through every bullet point here, but the message is simple. We've got a proven platform with really good customer reference sites. And those customers are becoming our best salespeople. You look in local government, it's a real contagion effect. You've probably see the customer map before. There's probably 8 councils that are all using Asset Vision within 300 kilometers of each other. And we're going to try and replicate that across other states. We're building a really, really strong team with great industry experience, and we're really proud of that. And it's a large and growing market. Infrastructure is everywhere, not only in Australia, it's the one thing that just keeps getting invested in, and we're right in the middle of it, which is pretty exciting. And I'll go to the bottom right-hand corner. There's a lot of talk about AI out in the market, and there's a lot of road map stuff. We've got AI in our customers' hands. They're paying for it today. 4% of our revenue now comes from artificial intelligence, which is pretty exciting. So we're -- we started early. Damian and his team, their productivity is going through the roof through the use of AI in the development practices. So it's a really great time for the platform and accelerated development as well. So yes, thanks for joining us today. I could see there's one question over in the Q&A. The Q&A is now open for post if anyone wants to post any questions. But apart from that, thanks for your time today.

Claude, I think we had a question from you. I'll just allow your mic.

I've got a few, but just stop me, you can -- if someone else wants to put in a question, I'm happy to let them go. The first thing I wanted to ask about was, okay, just an easy one to start with. You guys talk about how -- Damian mentioned, for example, how customers want to tell their peers about the success with Asset Vision. I'm really interested in understanding the role that word of mouth is having. You alluded to it multiple times, what is the role word of mouth is having in you having unlocked this organic growth? And then to that end, just in order to dig in more, could you please share your perception of how Asset Vision products are perceived by the market, both existing customers and potential customers? And I am specifically interested in both one strength in terms of how you're perceived, but also one weakness, if you'd be able to share that.

Yes, sure. I might take that for a start. Thanks, Claude. So yes, word of mouth is playing a really big part, not only in our organic growth, but it's also allowing us to get to tenders before they come to market because there's a couple of big tenders going around in Australia at the moment. And because the word of mouth is out there at the moment, we're being able to play a part in those tenders before they come to market. So we can actually influence tenders, which is really, really important for us. It's really strong in local government. Local government like to learn from each other. So we're seeing some really good, I suppose, collaboration between our existing clients and potential clients. So that contagion collaboration in that market, in particular, is really important.

Yes, right. So like strength and weakness?

Yes. Look, the strength is our platform meets the needs of every user in one of our customers, whether you're an asset planner, whether you're an engineer, whether you're managing capital works, whether you're managing maintenance teams, whether you're an asset accountant, Asset Vision now has all the functionality that you need to do your job in a very, very simple way. And in a simple way, that means we can configure the platform the way our customers want to work, not the way the system stipulates you need to work. So our customers are really enjoying that. What's a weakness to our platform at the moment? I don't perceive any weaknesses. Damian, you might want to chip in. What's your thoughts on the weakness?

Yes. I'll think about that. It's one of those hard things. But I think the strength that you just mentioned that the platform is so configurable, we go with the client and they tell us all their challenges and we configure it to suit how they want to work. Sometimes we are our own worst enemy in that way, like we can take on too much. We can allow, I suppose, a client to put everything into Asset Vision because they can. So we -- it's something like it's not a product weakness. It's probably just more of something that we need to watch a little bit more closely in how we implement, I think. But yes, it's I'm trying to think of another type of weakness...

That's actually -- that's a really useful answer, which leads into another thing I'm curious about, which is, please talk to me about implementation times and because this can be an incredible area of focus, right? This is one of the ways that you could differentiate yourself like but also the more you -- basically, my question is, are implementation times getting shorter? Is that something you're thinking about or targeting? Like could you talk me through the -- how you're thinking about that being? Because you're only a few years into getting this sort of fast growth. That's a big switch in implementation workload, I guess.

Yes. And so as local government is a really good example because they're all quite similar. Yes, they have their nuances and they all do things slightly differently. But at the end of the day, they're managing sort of council-owned assets. So they've got a certain amount of asset classes and whatnot. So we are sort of learning from each implementation that we do to sort of have a better blueprint, I suppose, to take our clients through when we onboard them. I suppose that whole -- the mission I was talking about before, which is kind of infused into our DNA about let's help our clients as much as possible, that can get out of control if you don't sort of focus just because the platform can do so much. So yes, we're trying to, I suppose, onboard them in, I guess, waves, I suppose. So they can get up and running as soon as possible and then come back and sort of add another asset class and get that up and running. So we kind of unlock the shorter implementation time and they just get up and running quicker so that then we can focus on what works with that and what would you like to improve and it's sort of iterative. So I don't know if that answers the question.

Yes, that does answer it. And so the way it works would be like you get them on the first thing that perhaps is the greatest need. They start paying for that, the cash starts flowing to that. And then you're looking at trying to increase them from there, which is showing up this year in the net retention rate being 110% or whatever it was.

Yes. Yes, that's correct. Yes. It's a really good example at the moment in WA Claude where there's a council customer, they started off with a basic Asset Vision subscription with a minimum amount of users. They are now really exploiting the platform. They've gone all the way. They're actually using it outside of asset management now. So an example is health inspections of restaurant and things like that. They love using Asset Vision's mobile capability and form building, but they've taken it into whole new use cases that we didn't even know about. And the great thing about customers and word of mouth and collaboration is that council will now talk to the next council, and that's how we're growing from an expansion point of view.

I need to zoom in on that point, though. In terms of those customers, right, where they're finding new use cases, how do you charge them? Like are you capturing upside to that? Is it usage-based or something like that?

Yes, it is. Yes. So it's user charging.