Pointerra share price in the red despite 'landmark quarter'

What happened in March for the 3D geospatial data technology provider?

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Key points

  • ASX investors appear unenthused by the latest report from Pointerra 
  • The company released its March quarter activities and cash flow report today 
  • The Pointerra share price is 2% in the red to trade at 24 cents 

ASX investors appear unenthused by the latest report from Pointerra Ltd (ASX: 3DP), with the company's share price 2% in the red to trade at 24 cents.

The ASX tech company released its March quarter activities and cash flow report this morning. Pointerra described March as a "landmark quarter" in which the company concurrently scaled up its platform use among four major US utility providers, while also broadly growing its annual contract value (ACV).

The company offers 3D geospatial data technology which enables clients to view locations around the world in real-time 3D format from any internet device.

Pointerra share price dips despite 71% growth in receipts

Highlights during the three months to 31 March included:

  • March quarter customer receipts of $2.4 million (71% year-on-year (YoY) growth vs. Q3 FY21)
  • Year-to-date customer receipts of $6.2 million (138% YoY growth vs. FY21)
  • Cash flow expenditure from operating activities of $2.3 million
  • Consecutive cash flow positive quarter from operations at $64,000
  • Cash flow expenditure from investing activities of $42,000
  • Cash and cash equivalents balance of $4.9 million as of 31 March

What happened in the March quarter for Pointerra?

The company continued to enhance its platform "in response to customer requests and in line with the Company's strategic product roadmap". The report highlighted a variety of improvements to the Pointerra3D Core, Pointerra3D Analytics, and Pointerra3D Answers segments of the platform.

Pointerra said the business is self-funding its organic growth. It said its analytics and answers segments, in particular, are "driving growth in ACV spend".

New customers have been added and existing customers across all six of Pointerra's target sectors — survey and mapping; AEC; utilities; transport; mining, oil and gas; and defence and intelligence — are increasing their ACV spend.

Pointerra reported a US$1.9 million increase in ACV in a separate enterprise sales and ACV update today. As at 29 April, ACV totals $US16.3 million, up from $US14.4 million as at 31 January.

What did management say?

According to the report:

The quarter was highlighted by step-change adoption in the scale of Pointerra3D platform deployment by US utility customers FPL, PG&E, Entergy & Eversource and reflects the continued development and adoption of the higher-value elements of the Pointerra3D solution portfolio — Analytics and Answers.

In relation to growing ACV, Pointerra said:

The Utility sector remains Pointerra's largest single contributor to ACV and whilst the US continues to dominate geographically, the quarter saw successful paid POC's delivered for Australian customers, which the Company expects to lead to new enterprise contracts in coming quarters, with new prospective clients in the United Kingdom and Europe also entering the sales pipeline during the quarter.

What's next for Pointerra?

Pointerra said it plans to accelerate the company's global expansion through the following initiatives:

  • Opening its first US office to provide a regional home for the business
  • Commencing operations in the UK to service the Europe, Middle East, and Africa (EMEA) region
  • Pursuing strategic M&A tuck-in acquisitions targeted to add domain knowledge in people and product in the AEC; transport; and mining, oil, and gas sectors

The Pointerra share price is down 40% year-to-date. ASX tech shares have had a rough year in 2022 so far with the broader S&P/ASX All Technology Index (ASX: XTX) down 24%. By comparison, the S&P/ASX All Ordinaries Index is down 2.8% over the same period.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Pointerra Limited. The Motley Fool Australia has recommended Pointerra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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