ikeGPS Accelerates Subscription Growth 48%, Rejects $170m Takeover Bid

Strong Subscription Momentum

ikeGPS Group Limited (ASX: IKE) has reported a compelling performance update for the quarter and full year ending 31 March 2025, underscoring its accelerating transition to a subscription-driven business model. The company’s annual platform subscription revenue exit run rate surged 48% year-on-year to NZ$17.6 million, reflecting robust demand for its PoleOS™ software platform among electric utilities and engineering service providers.

This growth was supported by a 34% increase in subscription revenue to NZ$14.4 million and a total revenue rise of 19% to NZ$25.2 million. Notably, the gross margin expanded significantly to 69%, up from 60% the previous year, driven by a favorable shift in revenue mix towards higher-margin subscription software products.

Major Contract Wins and Customer Expansion

The quarter saw the closure of approximately NZ$12 million in contracts, including multi-year agreements with two additional tier-1 U.S. investor-owned electric utilities. One of these contracts involves over 700 engineers using the IKE PoleForeman product, which launched in late 2023 and has already generated total contract value exceeding NZ$17 million.

These wins have propelled the total number of subscription seat licenses to over 8,500, more than doubling from the prior year. The company now counts 395 subscription customers, maintaining a steady customer base despite some legacy customers not transitioning to the new platform. The stickiness of these contracts and the expanding user base position ikeGPS well for sustained recurring revenue growth.

Financial Strength and Operational Discipline

ikeGPS’s balance sheet remains solid, with total cash and net receivables increasing by NZ$1.8 million during the quarter to NZ$15.4 million, including NZ$10.3 million in cash and no debt. This financial stability has been maintained despite significant investments in product development and market expansion, including the launch of five new products.

CEO Glenn Milnes highlighted the company’s disciplined approach to cost control and the positive impact of winning large subscription contracts on cash flow. The company expects ARR growth to continue at a strong pace of 35% or greater in FY26, supported by ongoing market tailwinds in North America and a growing pipeline of sales opportunities.

Acquisition Approach and Strategic Outlook

In a notable development, ikeGPS received a confidential, non-binding acquisition proposal valuing the company at approximately NZ$165-170 million, or NZ$1 per share, a 62% premium to the share price at the time. However, after engaging with key shareholders, the Board concluded that the offer lacked sufficient support to proceed and ceased discussions.

This decision reflects the Board’s confidence in the company’s growth trajectory and the value of its expanding subscription business. With eight of the ten largest U.S. electric utilities standardized on its software, ikeGPS is well positioned to capitalize on the increasing demand for grid resiliency and network capacity solutions.

Looking ahead, the company’s strategic focus remains on deepening penetration in the North American market, continuing product innovation, and driving recurring revenue growth. The strong operating momentum and financial discipline demonstrated in FY25 set a solid foundation for the next phase of expansion.