Shares in software company Vection Technologies Ltd (ASX: VR1) are charging higher to trade 22% in the green at 19.5 cents.
Vection shares have swung upwards in an almost vertical fashion in the past 2 days after the company released its enterprise sales and FY22 total contract value (TCM) update as of 9 November FY22 on Wednesday.
In its report, the company recognised strong sales growth in its defence, military and law enforcement segment. This was backed by strengths in its AEC and real estate divisions.
Let's take a closer look.
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But first – what is Vection?
Vection Technologies is a multinational software company that focuses on real-time technologies to help companies in their digital transformation.
Through a combination of 3D, Virtual Reality, Augmented Reality, and CAD solutions, Vection claims it can help companies and organisations to innovate and create value.
At the time of writing, Vection has a market capitalisation of $165 million.
Vection share price soars on growth momentum
The company grew both its military, defence and law enforcement plus AEC & real estate divisions, since last reporting its FY22 TCV.
During October, the company saw a 58% growth in FY22 TCV compared to its FY22 first quarter values.
As it stands at 9 November, the company's TCV is at approximately $8 million, with a strong pipeline of opportunities underpinning its FY22 outlook.
Vection attributes the bolus of growth in contract value to the adoption of its artificial intelligence (AI) integrated solutions, through partner channels in the defence segment from the Middle East.
It expects individual sales that are driving the TCV growth to be complete within various dates by the end of December 2021.
The release also notes that "quarterly cash receipts may vary depending on the solution and/or service provided to the end customer, and any individually material contract award will be separately announced to the market as applicable".
Separately, the company's XR integrated technology suite is "strategically positioned to drive enterprises' digital transformation".
Curiously, Vection also reckons this digital transformation is accelerated by the recent 'metaverse' trends observed in software circles.
The metaverse has recently been defined by newly Facebook's (Now Meta) Mark Zuckerberg as a place where one can meet, attend meetings, work and even play using a VR headset, glasses or a smart device.
Put simply, it is a virtual version of the real world. And Vection reckons recent momentum in the industry will bode in well for its earnings potential moving forward.
Investors have been quick to secure a spot in Vection's equity on the back of the results, sending its share price from a low of 14 cents to the current market price in just 2 days.
Vection share price snapshot
In the past 12 months, the Vection share price has climbed 56% after rallying over 62% this year to date.
Each of these returns is well ahead of the benchmark S&P/AX 200 index (ASX: XJO)'s return of around 16% in that time.
