FY23 Unaudited Results Announcement and Commentary

NZX and Media Release
29th August 2023

UNAUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2023

GEO Reports Return to Record Customer Acquisitions and Reduced Churn Following Successful Platform Rebuild

Cost-out programme delivers material reduction in cash burn after year end.

Geo Limited (NZX.GEO) today announces its unaudited financial results for the year ended 30 June 2023 financial year.

Financial & Operational Highlights for the Year Ended 30 June 2023*:

• Revenues: $3.50m down 0.2% on PCP**. Implementation of new billing system led to one-off decrease in monthly revenue recognition, revenue up 1.5% on a like-for-like basis.
• Expenses: $9.56m up 45.1% on PCP reflecting increased tech and product spend related to 18-month tech platform investment programme. Conclusion of the programme allowed for material cost reductions in August 2023, returning cost base to prior levels.
• EBITDA: $(4.81)m +139.6% on PCP.
• Balance sheet: In March 2023 the Company raised $3.74m with $1.24m from a pro rata rights issue and $2.5m via a loan from Pioneer Capital.
• Outlook: GEO has entered FY24 with confidence. Guidance provided in March 2023 for the period to 31 December 2023 for monthly cash burn run rate remains at ~$110k, with year-end MRR now estimated at ~$360k. These targets are underpinned by:
• Increasing revenues: price increases rolled out in Q3FY23, increased sales velocity delivered in Q4FY24, new revenue-generating product features rolled out and higher customer retention due to product improvements; and
• Reducing costs - material reductions in headcount and cash salary cuts were implemented after balance date.


* All figures are for the year ended 30 June 2023 unless otherwise stated
** Prior Corresponding Period

 [See Financial Year Summary table and Revenues and Customer Activity graphs in the attached PDF].

New Customer Activity

Following substantial platform investment, Q4FY23 new licence sales set a four-year high, with a 17% increase in average customer size over PCP driving this growth. GEO continues to see the average licence per new customer increasing in Q1FY24.

Customer Retention

Annualised retention dipped below target in Q1FY23 primarily due to churn of one large legacy health customer and who now requires specialist health sector features. Customer retention reverted to target levels in Q2-Q4, averaging 91% annualised levels.

Revenues

Subscription revenues declined 1.3% against PCP at $3.1 million, although this was partly impacted by GEO rolling out a new billing system (and daily revenue recognition approach) in July 2022 that led to a one-off reduction in July monthly revenue. Adjusting for this factor, underlying subscription revenue growth would have been +1.5%. Closing ARR for the period was in line with PCP.

GEO targets MRR to be $358k (up 36% on PCP) at December 2023, as a result of price increases, increased sales velocity delivered in Q4FY23 and new revenue-generating product features rolled out in early FY24.

EBITDA and Net Profit

The Company’s EBITDA loss increased from $2.01 million to $4.81 million, primarily due to expanded Product & Engineering resourcing to rapidly drive the launch of the new product platform through FY23. After balance date and following the release of the new platform, material reductions in headcount and cash salary cuts were implemented.
Customer acquisition / marketing spend increased by 42% on PCP. This included investment in the new technology marketing stack and the new GEO website. Total marketing costs will therefore also reduce in FY24 as marketing efforts are focused on direct customer acquisition only.
Statutory net loss after tax increased by 92% to $(6.1) million.
GEO maintains its target of a net cash burn of $110k (down 34.9% on PCP) as at 31 December 2023, as a result of revenue initiatives outlined above and the major cost reductions enabled by the conclusion of the GeoOp re-platform investment programme.

Cash

Adjusted operating and investing cash burn increased by $2.9 million versus PCP to $5.6 million, broadly in line with EBITDA.
The Company ended the period with net cash & equivalents of $0.9 million, down $1.9 million from 30 June 2022. GEO had undrawn funding available under the Pioneer facility of $1.0 million at 30 June 2023. The Company notes that it incurred a technical breach of a Pioneer funding facility covenant by not drawing down on it prior to 30 June 2023, resulting in the facility having to be classified as a current liability. Pioneer waived the technical breach on 21 July 2023. The Company expects the facility to be reported as a Non-Current Liability in future.

CEO Commentary FY23

Tim Molloy said:
“In FY23, we enhanced GeoOp's capabilities, requiring a significant additional investment across both front and back-end capabilities. This has now revitalised our GeoOp platform and allowed for rollout of new revenue generating features. We also initiated market entry in the UK and pleasingly delivered record Q4FY23 new customer acquisition results with a strong contribution from the UK.
“We’ve diversified our revenue streams with SMS, and payment solutions launched from Q3FY23. While it remains very early in the rollout and revenue contribution of these new features, we are targeting long term that these can provide ~15% of overall revenues.
“Despite challenging SaaS equity market conditions, we secured $3.7M in funding in Q3FY23.
“Following the completion of major platform improvements and acknowledging external economic uncertainty, we’ve rapidly reduced our cost base post balance date. This positions GEO to meet operating cash targets previously set out for end of CY23.
“I would like to thank the GEO team for their dedication, hard work and focus as we continue to advance your company.”



For more information:
Tim Molloy
Chief Executive Officer
Tel: +61 411 592 180
Email [email protected]


ABOUT GEO
GEO is a leading SaaS business that provides job management platforms for trades, field and home service businesses. The market for GEO’s products is growing quickly as the global mobile workforce expands. Geo’s simple yet powerful software platform helps business owners reduce the complexity of running their business whilst saving time and improving cashflow.
For more information: www.geoop.com  

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Announcement PDF