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Research: TMT
1Spatial’s momentum in the US has continued, with the company securing a $1.4m deal with the United States Forest Service (USFS). This is a new Federal government-level deal for the business, building on the momentum 1Spatial has been reporting at state level, where it now has contracts or framework agreements with 21 states (up from 18 at the FY24 year-end).
1Spatial |
Federal-level win in the US |
Contract win |
Technology |
9 October 2024 |
Share price performance
Business description
Analysts
1Spatial is a research client of Edison Investment Research Limited |
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1Spatial’s momentum in the US has continued, with the company securing a $1.4m deal with the United States Forest Service (USFS). This is a new Federal government-level deal for the business, building on the momentum 1Spatial has been reporting at state level, where it now has contracts or framework agreements with 21 states (up from 18 at the FY24 year-end).
Year end |
Revenue (£m) |
EBITDA* (£m) |
EBIT* |
EPS* |
EV/EBITDA |
P/E |
01/23 |
30.0 |
5.0 |
2.0 |
1.2 |
12.0 |
44.7 |
01/24 |
32.3 |
5.5 |
2.5 |
1.4 |
10.9 |
38.6 |
01/25e |
35.8 |
5.7 |
2.4 |
1.4 |
10.5 |
39.7 |
01/26e |
38.7 |
7.6 |
3.8 |
2.6 |
7.9 |
21.4 |
Note: *EBITDA, EBIT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
This latest win for 1Spatial’s enterprise business is notable because it is one of the first to include its add-in to ESRI’s ArcGIS Pro System as well as 1Integrate and 1Data Gateway. ESRI’s ArcGIS is the leading enterprise geospatial software platform globally, so this integration has the potential to open further meaningful opportunities for 1Spatial.
The deal also demonstrates 1Spatial’s ability to win high-margin enterprise software deals with important US customers. The USFS is responsible for managing 193 million acres of national forests and grassland and is deploying 1Spatial’s solution to build a more accurate data management solution to support more informed decision making on matters such as forest fire management and the preservation of healthy natural habitats for the nation. The contract is worth $1.4m with annual recurring revenue of $0.3m, which we expect should be at an attractive gross margin as it is heavily software weighted with little service element. Management also believes the deal has good scope for expansion.
This contract win provides support for our estimates, which are unchanged. The company reports its interim results on the 14 October.
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Research: Healthcare
IRLAB Therapeutics has announced that it will receive a $2.5m milestone payment from the McQuade Center for Strategic Research and Development (MSRD), prompted by the dosing of the first participant in a second Phase I trial for IRL757, which is being developed for apathy. The aim of this study is to assess the pharmacokinetics (PK), safety and tolerability of single ascending oral doses of IRL757 in healthy older adults (>65 years) and it is expected to conclude in late-Q424. The first Phase I study assessing IRL757 in younger subjects is ongoing. It is financed by the Michael J Fox Foundation (MJFF) and is anticipated to be completed by end-2024. As part of the MSRD agreement, IRLAB has received $3m as an up-front payment and we believe the company is eligible for a further $3m in development milestones, following this new $2.5m payment. MSRD could also expand the collaboration, subject to negotiations.