Envirosuite shares rise on half year results as recurring revenue takes off in global markets

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With established traction across three verticals, the company is uniquely positioned to benefit from broader environmental, social and governance (ESG) tailwinds.

Environmental intelligence company Envirosuite (ASX:EVS) has built strong momentum with a multi-channel product suite and a large global addressable market.

And that growth was bolstered by this morning’s numbers, as the company’s half-year trading showed EVS recorded its third consecutive six-month period of annual recurring revenue (ARR) growth, which reached $49 million.

This represents a 15.1% gain over the prior year period, and notably includes a 36.8% growth in the Americas region where EVS is building a strong presence on the ground.

And after successfully commercializing its EVS Water division, the company continues to implement a global scaling strategy in three key verticals.

EVS Aviation

Within its product line, EVS is a market leader in noise pollution monitoring tools in the aviation industry, where it provides services to 219 customer sites worldwide.

The EVS Aviation division is the largest chain in the group which contributed $32.5 million to ARR for the December half, up 6.5% from the prior year period.

Among its customers is Dublin Airport in Ireland – a major European traffic hub where EVS provides noise monitoring sensors and reports on key performance indicators outlined in its noise management plan.

During the middle of December, EVS also landed a long-term agreement with NASA to develop the X-59 – a supersonic aircraft equipped with technology to reduce the noise of a sonic boom.

EVS Omnis

The EVS Omnis platform is a cloud-based environmental management software designed to enable users to manage environmental risks related to issues such as air quality, dust, water quality, odors, noise and vibrations.

Consistent with the broader business momentum, the EVS Omnis division recorded $16.5 million in ARR during the December half, a gain of 33.5%.

Statutory revenue was $9.3 million, a gain of 12.2%.

Late last year, the EVS Omnis product suite saw a major boost in distribution when it announced a Memorandum of Understanding (MoU) for a key strategic partnership with Aeroqual.

Founded in 2001 and based in New Zealand, Aeroqual is a global air quality monitoring platform based on smart sensing technology and advanced software algorithms.

Under the terms of the MoU, the two parties will integrate their respective technology suites to create a combined value proposition serving key customers in the mining, general waste, wastewater and industrial sectors.

EVS Water

Complementing the group’s product range, its early traction with the launch of EVS Water gives the company another opportunity to expand into a rapidly growing global market, as business demand for efficient water solutions becomes more critical.

After successfully commercializing its monitoring solutions for wastewater and drinking water management, the EVS Water division is already building a solid customer base, including Water Corporation, Western Australia’s water utility.

On this project, EVS Water’s SaaS product SeweX will be used “to support proactive corrosion, odor and safety management in sulphide and methane-related sewer systems,” the company said.

In line with the market opportunity for water management, EVS completed a $10.5 million equity placement in December which received strong support from institutional investors.

A portion of these funds have been allocated to expanding the workforce in technical and commercial roles, to meet demand from the company’s expanded product base.

Along with SeweX, the sales team will also focus on distributing Plant Optimizer, which provides analysis and forecasting tools for clean water compliance.

EVS Water’s services will also be provided in a desalination and drinking water plant in Asia, and in the framework of the recently announced strategic partnership with the multinational engineering services company GHD.

Overview

The strong momentum in each of EVS’ divisions gives it a solid platform for further growth in the years to come.

Based on its global opportunity, the company recently hired a US-based chief operating officer and a new chief financial officer, while bolstering the strength of its board of directors with three new appointments this week.

With this in mind, the management team seeks to implement a “land, expand and scale” strategy.

“Envirosuite is focused on building long-term customer relationships, moving from single site to multiple sites, increasing our value with customers, and ultimately transitioning to enterprise agreements,” the company said.

“This strategy will reduce our acquisition costs and focus the team on creating and communicating long-term value to our customers.

This article was developed in conjunction with Envirosuite, a Stockhead advertiser at the time of publication.

This article does not constitute advice on financial products. You should consider obtaining independent advice before making any financial decisions.

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