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SenSen receives highest ever quarterly cash receipts as it moves towards being cashflow positive and profitable in FY21

Snapshot

The AI solutions provider did not lose any of its customers in the last two years and many of its existing customers have ordered more software and services.

SenSen Networks Ltd - SenSen receives highest ever quarterly cash receipts in June quarter as it moves towards being cashflow positive and profitable in FY2021

Quick facts: SenSen Networks Ltd

Price: 0.09 AUD

ASX:SNS
Market: ASX
Market Cap: $40.55 m
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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 SenSen’s 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.

Smart Cities

Fitting out City of Las Vegas Parking Services vehicles

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 SenSen’s 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 SenSen’s 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 applicable additional gaming tables is anticipated to start on completion of the installations in the first quarter of 2021.

SenSen expects more orders to come through.

It is continuing to develop the SenGAME gaming solution technology to meet customer requirements and believes it is well placed to take advantage of the expected recovery in the gaming industry from 2021.

In addition to optimising table game operations, SenSen’s AI and video analytics technology can assist casinos with monitoring of social distancing measures, people counting, compliance verification of occupancy in buildings, and parking traffic management.

R&D with University of Melbourne

SenSen and the University of Melbourne have received a prestigious research grant from the Australian Research Council (ARC) to develop more accurate and efficient methods to digitise Smart City assets.

ARC is providing A$370,000 and SenSen will contribute around A$240,000 to support the three-year collaborative project, with both organisations committing additional in-kind resources.

This research will help SenSen develop products and solutions using AI for traffic engineering departments within city councils.

The technological breakthroughs proposed have the potential to enhance the delivery of services offered to cities globally by SenForce and SenSign vehicles.

New innovations for GPS accuracy

That is not all as SenSen has been able to overcome some significant challenges to GPS systems posed by tall buildings and infrastructure after working on challenging megacity parking management applications in cities like Chicago.

The new breakthrough innovation will significantly improve the location accuracy of objects such as vehicles, signs and other objects captured by mobile camera systems like SenForce.

This is expected to further consolidate the company’s leadership position in automating civic compliance (SenForce) and asset audit (SenSign) products.

SenSen Vision Zero product platform

SenSen has also developed a new AI camera technology to support cities globally on their Vision Zero initiatives and save lives on roads.

This SVZ product is one of the most advanced analytics platforms ever conceived to save the lives of people on roads worldwide. Using SVZ, cities globally may enforce any combination of road safety regulations concerning speeding vehicles, and distracted and dangerous drivers using smartphones while driving.

A variety of deployment configurations are supported, including fixed gantry-mounted configuration, off-road side-mounted configuration, mobile vehicle-mounted configuration and rapidly deployable solar-powered configurations.

This will make saving lives on roads more cost-effective and affordable, increasing the ability of authorities to monitor more places prone to road accidents for the same budget.

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