There are five key reasons why SenSen represents an exciting investment case.

• First, SenSen’s blue chip, largely government customer base generates stable, long-term contracts with minimal bad debt and low churn. Each contract has strong potential to expand over time.
• Second, SenSen has demonstrated global relevance, with a customer footprint which spans Australia, New Zealand, Canada, USA and Asia. The group’s established partner network in these regions bolsters its global reach.
  North America is a key strategic focus, with a view of opening a market many times the size of Australia. SenSen has a growing customer base in Canada and has secured key partnerships wins in the US with over 90 government and enterprise customers.
• Third, SenSen’s SenDISA platform can be deployed across a wide range of applications, enlarging the company’s addressable market and supporting upsells with existing clients.
  SenDISA is already deployed in a variety of smart cities use cases, including smart parking, heavy vehicle monitoring, theft prevention and infrastructure audits, with scope to expand into other areas including mining, logistics and defence.
  SenSen operates in the vast global computer vision AI market, which is expected to reach US$207bn by 2030 growing at a CAGR of 39.6% from 2021 to 2030. The edge AI market is also projected to grow rapidly at a CAGR of 20.8%, reaching US$39.61bn by 2032 according to market estimates.
• Fourth, following cost reductions implemented in FY23 and H124, the group generated positive operating cash flows for the first time in its history in H1, and we expect this trend to continue, with our forecasts showing sustainable cash flow positivity.
  SenSen has an operationally geared business model. A programme to reduce annual costs by a further A$2m supports our expectation of margin expansion and cash generation from here.
• Finally, SenSen’s current valuation fails to properly reflect its strong upsell track record in our opinion, limited churn and status as one of the only companies among its peers forecast to reach EBITDA profitability in FY24 per consensus. Further smart city wins, particularly in the US, would be a key lead indicator of SenSen’s ability to deliver on the smart cities opportunity and drive a re-rating upwards.

In summary, SenSen offers exposure to a business with differentiated edge AI platform technology for vision analytics. The total addressable market for the company’s solutions is large and SenSen is gaining traction across a wide range of use cases and geographical markets. Now established in the substantial North American market and with cost reductions realised, the group looks well positioned for strong operationally geared growth.