exactEarth 2018 Year End Results Show Modest Progress

exactEarth today released its fourth quarter and year end results for 2018 which showed revenue of $13.0M compared to $12.8M the previous year.

Its fourth quarter 2018 results were encouraging with revenue of $3.8M, up 32% compared to $2.9M for the same period in 2017.

Importantly, and subsequent to their year-end, the company completed a $13.0 million private placement of convertible debentures which is says strengthens its balance sheet and will support its exactView RT growth plans.

The exactView RT service now has 51 payload sensors operational which the company says achieves its “real-time S-AIS performance with message latency of less than one minute.”

Subsequent to the year end, and in addition to the current 51 exactView RT sensors on-orbit, a SpaceX Falcon 9 launched the last 10 Iridium NEXT satellites on January 11 which included the final 10 exactEarth hosted payloads.

With all of its second-generation sensors on-orbit, 2019 may be a breakout year for the company.

The company’s revenue backlog was $31.5M at year-end, compared to $26.M at the end of 2017.

In a press release with 2018 fiscal year results Peter Mabson, President & CEO of exactEarth said “driven by the growing adoption of our real-time S-AIS service, exactView RT, our revenue trend was favourable in 2018, which culminated in Q4 results that generated a significant year-over-year increase in subscription revenue and in our order backlog. In 2018, we also took positive steps to strengthen our balance sheet and reduce our cash burn. The SIF (Canada Strategic Innovation Fund) funding announcement in Q4 and private placement financing completed shortly after Q4 provide the Company with significant financial flexibility and approximately $20.0 million in capital to support operational and growth initiatives. Of note, the SIF payment of $1.2 million in Q4 represented a catch-up from Q2 through the end of the fiscal year, so quarterly SIF payments will be more moderate going forward.”

Mr. Mabson also said “looking out to 2019, our agreement with Harris Corp will come into full-effect and we expect to have all 58 payloads in our second-generation constellation fully-operational. We believe we have a significant growth opportunity in front of us and we will continue to leverage the unique real-time capabilities of exactView RT to develop and launch new analytics products and to maintain sales momentum in our core S-AIS market, while further expanding our footprint in the broader maritime information services market.”

Other highlights from fiscal year 2018 include;

• Fiscal 2018 revenue was $13.0 million, up 1% compared to $12.8 million in Fiscal 2017;
• Subscription-based revenue was 90% of total revenue in Q4 2018 (Q4 2017: 94%) and 87% of total revenue in Fiscal 2018 (Fiscal 2017: 83%);
• Subscription-based revenue increased 27% in Q4 2018 compared to Q4 2017, and 6% in Fiscal 2018 compared to Fiscal 2017;
• Revenue backlog was $31.5 million at year-end, compared to $26.0 million at the end of Fiscal 2017 and $29.3 million at the end of Q3 2018;
• Adjusted EBITDA* was $1.0 million in Q4 2018 compared to ($1.4) million in Q4 2017. Fiscal 2018 Adjusted EBITDA was ($3.2) million compared to ($4.4) million in Fiscal 2017;
• Cash balance was $4.8 million at year-end compared to $8.1 million at the end of Fiscal 2017 and $3.5 million at the end of Q3 2018;
• Announced the first commercial and fully-operational AIS payload onboard a radar satellite with the launch and commissioning of the Spanish radar satellite, PAZ;
• Entered into an alliance agreement with IHS Markit (NASDAQ: INFO) to launch AIS Platinum, which offers unprecedented frequency and coverage of vessel movements worldwide;
• Government of Canada’s Strategic Innovation Fund (“SIF”) committed to an investment of up to $7.2 million over three years to support the development, management and expansion of exactView RT;
• Subsequent to year-end, completed a $13.0 million private placement of convertible debentures to strengthen the balance sheet and support exactView RT growth plans; and
• Subsequent to quarter-end, the final launch of the Iridium NEXT constellation successfully took place with ten more exactView RT payloads onboard.

The company’s stock price was up on the results.