SenSen Networks Ltd (ASX:SNS) recorded two of its best-ever cash flow quarters in the 2020 financial year and is robustly moving towards being cashflow positive and profitable in FY21 as it continues to see strong software sales despite COVID-19.
In the June quarter, the company received its highest ever quarterly cash receipts of A$1.43 million from customers, which represented around a 150% increase on the 2019 corresponding quarter and around 90%on the March 2020 quarter.
Also in the quarter, SenSen received cash amounting to about A$472,000 from research & development tax credits and believes it is likely to receive around A$1.6 million from the Australian Taxation Office in the current half as R&D tax incentive payment and FY20 lodgements.
The company highlighted its execution capabilities, noting that there were no interruptions or delays to customer deliveries and support due to COVID-19 despite the fact that 90% of its staff were working remotely.
Further, SenSen did not lose any of its customers in the last two years and many of its existing customers have ordered more software and services from the company.
June quarter financial update
In the June quarter, the company improved its cash position and had around A$2.48 million at June 30, up from around A$127,000 at the March quarter-end and with no material COVID-19 related government support.
The company said its annual recurring revenue profile continued to grow strongly during the quarter.
With confirmed contracted revenues of around A$5.6 million (annual recurring revenue of around A$3.5 million), SenSen reaffirmed its March 2020 quarter guidance that it is likely to be profitable and cashflow positive in the financial year 2021.
Any additional contract wins or revenue from other sources will increase SenSens profitability in the financial year 2021.
SenSen attributed its robust performance in the quarter to strong software sales from its globally diversified customer base despite COVID-19 impacting other areas of the economy.
Further, the company received additional payments from Chicago Parking Meters towards the trial of its Gemineye solution after the successful completion of earlier trials involving vehicle-mounted cameras systems.
Key management personnel
SenSen's non-executive director Heather Scheibenstock has taken on an executive position as executive director, Retail & Leisure division, with effect from July 6, 2020.
In this role, she is responsible for providing strategic, financial and operational leadership for division and guiding corporate governance and organisational development for the entire organisation.
Scheibenstock will also closely coordinate and work with the board and senior leadership team to design and implement business strategies, plans and procedures to drive revenue and EBITDA growth in the division.
In the March quarterly report, the company said its board of directors had taken on additional workload after some roles were made redundant and functions were consolidated to drive general efficiencies.
It said cost-cutting measures were continuing, including across-the-board 20% reduction in salaries and reductions in sales, marketing, travel, office and IT costs.
The installation and deployment of SenSen's A$2.5 million contract with the City of Las Vegas is underway, with two City Parking Services vehicles already fitted out with SenFORCE mobile parking enforcement units and the Gemineye units and installation kits.
Software commissioning of the multi-faceted SenSen solution has commenced and project handover to the city is scheduled for early September.
In April, SenSen won its first commercial US customer, the City of Las Vegas, which covered the deployment of 80 Gemineye units to be used by city officers patrolling streets and car parks on enforcement vehicles, segways and Go4 scooters.
On its contract with Transport for NSW (TfNSW), the new SenSPEED 3.0 ANPR camera and software solution was deployed and has been successful in meeting the high standards set by TfNSW for speed measurement and enforcement purposes. Its financial year 2021 software maintenance program was also agreed with TfNSW in June.
The road safety cameras are powered by SenSens AI software to measure and enforce vehicle average speeds between designated locations.
Following the successful completion of earlier trials involving vehicle-mounted cameras systems, broader commercial discussions are underway with Chicago Parking Meters.
In addition, SenSen received its first orders from New Zealand, with an initial five Gemineye licences procured by Nelson City Council through a reseller arrangement with Integrated Technology Solutions (ITS), which is part of the Linfox Armaguard Group.
ITS is also showcasing the Gemineye solution to five of its US customer city councils and SenSen expects more orders to follow.
The company is continuing trials for the Gemineye offering globally and is in commercial discussions with multiple parties in Australia, New Zealand, the US, India and the Middle East.
Based on feedback received from US customers and institutions, SenSen said it expected to enhance its North American presence once travel restrictions were lifted post-COVID-19.
Further, the paid Driver Distraction Trial is likely to begin this quarter, after COVID-19-related restrictions delayed the February start date.
SenSen has successfully completed the development of technology that combines high resolution, high-sensitivity machine vision cameras with its novel deep Artificial Intelligence (AI) technology, and following participation in a rigorous Request for Information (RFI) process.
Retail & Leisure
The company will also re-visit existing casino opportunities through direct engagement with casino groups, and explore other distributor and value-added reseller arrangements, after terminating the exclusive distribution agreement with Japan-based Angel Japan Co Ltd last month. That company was appointed SenSens exclusive distributor of SenGAME 3.0 worldwide effective January 1, 2020.
Despite COVID-19, the company continued to receive orders for the hardware and installation of SenGAME 3.0 on a further 76 tables under existing arrangements and received advance payments of over A$450,000 for these new deployments.
The contracted monthly recurring revenues for SenGAME 3.0 software licences on appRead More – Source