RocketDNA Ltd. (RKT.AX) Earnings Call Transcript & Summary

Okay. People joining now. So good morning, everyone, and thank you very much for joining us. My name is Mark Flynn, Investor Relations at IRX and with RocketDNA. Today's session is deliberately focused on last week's ASX announcement and what sits behind it. That update was definitely about new contracts, customer expansion and how our data and software platforms are becoming more embedded in customer operations. So we're not here to cover everything in the business today, but the broader detail will definitely come through in that quarterly and 4C that we drew out in late Jan. So today is about making sure we understand and everyone understands the shape of the momentum we're seeing and how we framed last week's announcement and why expansion matters more than first wins. I'm joined by, as always, by Chris Clark, our Managing Director and CEO; and David Morton, our Chairman, is online as well. Different format today. I'm going to ask Chris a series of questions to unpack the announcement and the role of data and software in these contracts and how this sets up the next phase of growth, and we're very happy to take any questions. But we'll keep the discussion, if we can, centered on the announcement and the trajectory it reflects. We've definitely received a number of questions, and I'll try and get to those that focus on the announcement. But if you have further questions related to what we're talking about today, please feel free to use the Q&A function, and I'll address those as time allows.

So just a first question, Chris, at a high level, where does RocketDNA sit today after a great year of 2025?

Thanks, Mark, and good morning to everyone. Really great to I guess, have this opportunity again just to sort of guess recap and sort of coming off last week's announcement as well, good morning as well, David. Mark, yes, I think for RocketDNA and we're sort of reflecting back at '25 and sort of the year that we've really sort of had, it was really all about the execution. '24 and previous sort of years was really about validating the product and the solution. And this year was really about that scalability, focusing on the basics, just delivering and being essentially being rewarded for the fact of that. Customers, especially in mining are very cynical. If something doesn't work the first time, they disregard it completely outright. So you've got to be really careful and really sure about how you implement these systems in the right settings in a very sort of structured manner and then deploy them. And this is really the roots of when you're dealing with Tier 1s, it's a really critical thing because the opportunities are massive, but a lot of people sort of always generally stumble at the first sort of steps. And at Rocket, we have really been focused about having this disciplined approach that has now been reflected in customer repeat orders that have come through. So yes, we really believe now that the foundations have been set, the momentum is now in place and it's become very visible. So yes, we're really excited for what we've achieved by the end of this year.

Thank you. Obviously, we are reflecting on that announcement last week and a lot of work went in to sort of bring that conglomerate of contracts and customers together. What should investors really take from that update? What can we say here today?

Yes. Thanks, Mark. I think the -- building on the -- again, that repeatability. So customers really just having that confidence and saying, look, this has now become part of our operations, right? Like it's ingrained into our workflows and customers' needs obviously are growing and thus, we need to be deploying or buying more of this particular solution. So I think what's sort of the first sort of things is to understand is, again, these are all contracts. They're now becoming a lot more longer term. A lot of them are coming out of trial phases, which generally or sort of short-term arrangements, which have only been a couple of months or 6 months and now with the BHP order coming along 12 months straight out of the bat. So again, a lot of confidence coming through the repeat orders, a bit of a mix and a blend of new and existing orders within it. And it's really about the maturity of the solution and the understanding by the customers of what they can do with this because when we kind of look at these systems and these deployments, it's not just about scaling horizontally and deploying more hardware systems across to more sites, even within existing customers or new customers, but also scaling vertically in the number of applications that we're seeing our customers use this for. So we're getting this sort of exponential growth on 2 different planes, if you will, that's really been the most encouraging part about this business model and what we've seen come through this year.

One thing we did announce last week was our first deployment into BHP Western Australian Iron Ore. We've obviously had BHP Mitsubishi Alliance, another part of the BHP group. But why does this contract really matter with the BHP WA iron ore?

Yes. It's a really important one for us, Mark, because I think with any sort of Tier 1, getting to their operations is it takes a long time. It's really hard. And so there's not only is going to be the business and a value case before these Tier 1s bring you into the fold, but they've got to kind of believe that, a, that you're going to be around long enough to implement it and really understand like their needs because it's not again just about supplying a product, but it's about ticking the vast amounts of checklist from cybersecurity and safety and a whole lot of other sort of requirements. So this very first requirement for BHP is really the -- where I guess them and us both are seeing that automation, it's a given. It's -- customers and especially Tier 1s are leaning more into automation and these kind of solutions and Rocket being really sort of big part of that and with drones having a very, very immediate ROI within the factor, it's -- for them, it's about going coming in and saying, look, we want to use the Rocket sort of plan, the sort of franchise model like as we sort of deploy this out, they're able to say, right, we don't know how we're going to deploy this kind of technology, but we then bring in Rocket who then comes and sets it up and makes it really easy for us. What this sort of allows us to do is that not only expand on the existing rollout that we've had across other BHP sites in coal and copper and now into iron ore, but this also then exposes us and allows us to expand the software applications across it because what we've seen in the Tier 1 space is not just about the automation and how we can safely conduct these operations or remove people out of open pits and other areas. But what we've also identified is a really big unmet demand in the software and the geospatial space. Right now, these users have only got really expensive either engineering or CAD platforms where they're spending millions of dollars in software licensing, but there's a whole suite of users within other departments that don't have access to these tools. And so what we realized when we were deploying these systems is, a, the amount of the demand for geospatial data is probably about 10x larger than what we all expected. And then on the back of that, the ability to consume or digest that data, there is no tools that exist for them. And so that's where we spend a lot of our time and recently even brought on a new Head of Product to really focus on these opportunities because, again, with Tier 1s is it's not about a money problem for them. It's about can you fix their problem and speak to their case? And again, we don't have a shortage of opportunities. We just want to make sure that we're speaking directly to taking the opportunities that we have, especially within BMA, BHP to say, look, we're coming for you, whatever you want, we're going to be going very hard at this and making sure that we fill this void that of unmet demand that you've just never been able to get from anyone else. And so just taking BHP as an example, the conversations that they're sort of having is saying, how do we go global? How do we take this to all our other areas where, for example, like Escondida, their largest sort of copper project in South America, has got 100 drones flying there just in the single pit that's operating, they say, look, it's an accident waiting to happen. How do we standardize, bring in more automation and bring the factors. So yes, we're about focus on Australia first, get this done in this sort of first half of '26 and then sort of just be naturally led to other customers for global opportunities that present themselves.

It's quite a good link because we are seeing some green shoots out of South Africa, something that obviously, we're quite excited about. The contract with Assmang is certainly one that we see as a land and expand example. So what's the relationship there, not just with Assmang, but also with South Africa and where is that leading?

That's right, yes. So Assmang has given us not only a renewal of the contract, but they've now even expanded the work taking on our xBot solution as well, and which is really quite interesting because I guess when we sort of develop the xBot automation, you typically think they want less people on site or that it may actually cannibalize some of our existing contracts. And actually, in this case, it actually led to an expansion of the overall amount of work that we're now doing for this particular customer, which is really interesting in itself. So again, it just proves that we've nailed down our marketing and our sales formula where we're really, really confident in the price point and how we can drop these units off and let the units really kind of almost just prove themselves in a short sort of trial or proof of concept and then be able to convert them very quickly to paying customers. And it just demonstrates the value or the immediate, again, ROI that these customers see and just how simple and how seamless the solution just works. And it's just resilient. It just gives the customers what they need, when they need it and how that use or the growth of it over time just kind of speaks for itself. So I think the Assmang opportunity is really a great again, validation of the overall commercial model and understanding that we're on the right track. And there's still a lot of money on the table across all these customers, again, as we implement more of the software features and functionality.

And just on paying customers and current customers, we have named Norton Gold Fields in this announcement. Customers like Norton, I think for the investors listening today, how do they actually use the platform day to day? What -- how does Norton use the xBot and what are they using it for?

Yes. So Norton Gold Fields is a very interesting case. So they came to us about over a year ago, purchased a unit and it was predominantly for the geology team. So they were very much focused on how they could effectively shorten the post-blast sort of workflow because right now, what happens is you sort of conduct a blast, the geologists wait for the survey team to drive out, fly with the drone, then take that data back, process it and then do their cults and then come back and sort of spray paint on the mudpile where the diggers can then dig, that process can sometimes take a couple of hours to really to do. And so Norton sort of present -- came to us and said, look, we really want to sort of shorten this mining cycle. We want to get to the product a lot quicker. We want to be attacking those -- the sort of the higher grades within the mudpile because our processing plant is at capacity. And so we don't want to just be pushing through dirt. We want to be pushing through as much high-grade product as possible. How do we do this? And so the overall market and the tools available, I guess, the maturity of how systems are now integrated and used to help in these decision-making has now got to the level that everything is pretty much seamless. So the solution we implemented for Norton was immediately post the blast, the drone is taking off, capturing that data, processing in the cloud and delivering their surface model really within like 15, 20 minutes. That means the geologists are able to literally just wait in 5 minutes, click get the data they need and then drive out and spray. So down to sort of 40 minutes, which used to take them a couple of hours. And that has been kind of almost revolutionary for their particular business as well. And so we've now got additional orders for additional pits, but as well as additional use cases such as water leaking or pipeline monitoring, encroachment monitoring. So the application use case just continues to grow.

One of the exciting parts that we sort of continue and we had at our the MicroCaps conference and obviously, the Morgans conference and others as well, we've talked about our software and especially SiteTube. And we've spoken about how that's becoming very, very important. And how is SiteTube now contributing to that business? And where do you see that going?

Yes. SiteTube has always been, I guess, was sort of like a bit of a dark horse, right? Because when we started deploying it as a product, we kind of positioned it as like sort of as a Google Drive basic visualization tool. And we weren't even charging for it. We just thought, look, this is just part of the solution. People need to get access to their data. And what we again found was that massive sort of missing middle of users that's never been able to get access to drone data. They always had to go an in-person sort of beg and plead with surveyors who already had their plates full with just their normal jobs. And what would happen is all these other departments will be saying, look, I need to get access to -- I just need this little job. This is a quick 5-minute job. This is a 10-minute job. But all of those jobs together could probably add up to 2 or 3 new people just going out flying drones. Now with an xBot and the SiteTube solution, you're again able to request a quick mission and be able to consume that data in less than 15 minutes. And it really allows customers that direct access to the data and allows us to be able to scale the opportunity because we'll be capturing and modeling the whole entire mine, let's say, once or twice, but then it gets used across 60, 70 people on a particular mine site. And where we're really seeing the opportunity here is taking the SiteTube product and adding more functionality and tools on to that so that we can meet the demands of all these users who just want something simple, easy to use and effective that allows them to really sort of interrogate, measure and sort of model their data that they need and that they can bring it into their workflows, whether it being environmental, geotechnical, metrogy -- like meteorology, sorry, but the -- whatever sort of departments they may be in. And effectively, that actually becomes a really big sticking point for Rocket. So sort of retention ratios, this is what customers see and really add that real-time effectiveness to the mine visualization.

Where you're sitting right now in -- or behind you in the screenshot is the remote operating center in Perth, which we've opened this year as well. Obviously, in the static photo behind you. But can you explain how that's been so important to the expansion model? Staff numbers, what you're deploying there and operations through that -- through the day?

Yes. I guess the remote operating center is one of the things that adds to our moat. I guess the -- if you're kind of looking at RocketDNA's your sort of uniqueness, it's not just the CASA approvals, remote operations, the hardware design, the software. It's all of these things together, which increases the size of that particular overall moat. And the remote operations center is something that we're particularly proud of, and it's an art form and a business in itself because not only are you sort of making sure that this is operational 7 days a week, enabling safe and secure operations for all our customers even on Christmas Day and New Year's Day as well. But it ensures that consistency, the quality control. It allows us to scale more effectively because guess while you might have -- I mean people and bodies and seats here, we're effectively allowing those users to be able to fly more drones from a single person, so really allowing one too many operations over time. Probably to sort of clarify, the technology is already there. You don't need people flying drones, and we don't have people like mainly flying these drones. They're effectively just watching the drones fly like these waypoint missions that are already all sort of, like, say, automated or semi-automated already. But where we're seeing the -- and the reason why they're there is really from a CASA and safety regulatory point of view. But as we're scaling on across existing customers and take BMA, for example, you don't need to be having 16 pilots for all 16 drones that are out there. You're able to monitor multiple drones in the air at the same time. And as we build out more and more of the safety features and functionality to allow us to be able to react to, let's say, helicopters coming to the airspace and be able to prove that to CASA, we eventually would be getting to the point where you just need 1 or 2 people that can monitor hundreds of these drones worldwide. So it's a part of our IP in itself about how we run this, how we build the safety systems, how we prove to the regulator, how we can scale it. So again, a lot more opportunity to improve margins within the existing operations that we already have as well.

Great. Thank you. Questions on the capital position that we've received from a few investors through the week. So -- and again, it was pretty direct. How should investors think about capital discipline following the raise earlier this year? Where do we sit? And what's the plan?

Yes. We've always -- look, we've always been focused on building technology for a problem that already exists, not trying to build something and then go looking for the problem, right? So all the money that we've recently raised again, is really to use into realizing opportunities that we've already got on the table. So delivering on the BMAs, we've got a really healthy pipeline. Probably we've got enough work here that's going to keep us busy. I mean my team really installing and even myself, I'm going to be out in the field with the teams onboarding, helping customers in until March. That's sort of how big our pipeline is. And so we're going to be allocating those funds to not only building out the units and deploying them, commissioning them and get them up and running and integration. But the big part really is about investing into that software play as well. So as I mentioned, we brought on Simon now, who's our Head of Product. And effectively, I've sort of put them in front of the BMA guys because they've got a massive long list of demands of needs that they're not getting from any other software product and they've said, Chris, this is what we want. And I pretty much connect to them and Simon and I said, you guys, you talk whatever you want, BMA, I mean we're here for you. And I think that's a really unique position, right, that everything else had to come together, the xBot hardware, the remote ops, everything that's now created this unique data opportunity and the customers are saying, we want to be visualizing our minds in real time 24/7 and extracting information from that, how do you help us get that easier. And so that's really our mission, right, is to be the enabler to provide the seamless tools that you don't have to spend 6 weeks learning and just being focused, just like doing the simple things, doing them well, being able to scale them. And yes, effectively, our growth remains very measured and just focus on that operational control. So I think what you're going to be seeing out of us is, again, is just that a lot of that organic growth coming through from customers who are just ecstatic with the product, see the immediate benefits, very much like what happened with BMA and now you're seeing with BHP in general, where the next orders are really sort of just coming through because they've heard great things and they just -- they want to experience it for themselves. So all the new sites jump on board.

Excellent. Another one is the share registry. So there's been a fair bit of movement on the share registry lately. Our new largest shareholder is online. I can see him on the list. How should investors interpret that change with Altor exiting?

Yes. So the -- Altor was a really great supporter of Rocket for a long time. They had a strategy change sort of during the year as well. And that really created an opportunity for new sort of shareholders to really come on board. I think between the Board, I think we feel that we sort of managed sort of the handling sort of well of sort of the offboarding of Altor as well. And I guess everyone is really happy. I think there's no, I guess, sort of hard feelings, nothing in it was, again, just a sort of change of business tact as well. And I think we're really excited to have Daniel on board as well, who you would have all seen is sort of a new substantial holder within the business, who overall brings more stability to the registry going in '26. I think we're all sort of seeing the orders on the screen and we're sort of realizing that those who want to be in the business are now in the business. And are on that cap table. And we're really excited to have you all there and sharing in the story and in this journey, which I think we can all see is really beginning to sort of show those green shoots of really long-term growth.

Just on that growth and crystal balling a little bit without providing too much and holding you to it there, Chris, but sort of that as we look into 2026, what should people be watching for?

Yes. Yes. I think it's pretty much the same strategy, but at a larger scale. We're going to see a lot more expansion within these Tier 1 customers, more sites per customers, a continued shift in the product mix towards the sort of the services, data and software products within it as well. So again, it's there's so much on the table, so many opportunities for us. And it's really about being consistent and being disciplined in that approach and sort of having, I guess, our North Star, we knowing who we are, where we're going and which part that we play in because again, we're under no sort of doubt about the size of the business, what we are. And so we've got to use everything that we have to be highly, highly effective because I really kind of feel that we're not going to stay at the size forever. I think we're definitely playing and coming after some of the really big markets and big opportunities as like. And we want to make sure that we capture as much of like you sort of mentioned sort of this land of our expansion strategy as quickly as we can, but within a disciplined view.

That sounds good. We'll probably wrap it up there. But as always, is there any final messages for shareholders now, and then we'll look to provide that quarterly at the end of June.

Yes. Thanks, Mark. Yes, I think there'll probably be a lot more detail coming through in the quarter, especially around the numbers side as well. But I think overall, sort of going into holidays, I guess, for myself and David and the Board, we really want to just say thank you to our shareholders, especially those that have been with us in the longer ones as well. We appreciate all your support and patience. But what we can always guarantee you from our side is that we're just going to be focusing on doing those basics really well. We're going to build this business through really trust and execution and just delivery of just good product and good service and just be brave really. We're going to keep pushing those boundaries where we feel it makes sense and just keep tackling those big problems. And I think we'll be naturally rewarded for that. And together, we will be rewarded. So for that, we're very grateful.

Awesome. All right. Well, we're almost at the half an hour mark. So thank you very much, everyone, for joining, whether you're on the holidays or maybe Michael Spencer is already at the beach. But thank you very much for all joining. And please, if any questions post this, please send Chris or myself or David an e-mail. Happy to engage and look forward to communicating in January. Thank you very much, everyone.

Thanks, everyone. Thanks.