SenSen Networks Ltd (ASX:SNS, OTCQB:SNNSF) posted record annual revenues of A$9.1 million in the 2022 financial year and record quarterly sales cash inflow of A$3.7 million in the June quarter, as it continues its push into North America.
The company has been successful in winning multiple multi-year contracts with new customers in North America, generating initial consolidated upfront and annual recurring revenues of roughly A$600,000, despite strong headwinds in global markets.
Canada and beyond
New customers of the company’s cutting-edge AI sensor solutions include the coveted Smart City Vancouver – won in an open tender process – and its sister city, Abbotsford, in British Columbia, Canada.
The two cities join other long-term customers in Canada, including Calgary and Edmonton.
The company’s sales team is also working hard on several other Canadian cities and major US municipalities close to the Canadian border.
SenSen has also received new orders from leading hospital chains and school districts in the US to assist security operations and improve safety of patients and children.
Upselling and cross-selling to grow
The company expects that, as with previous contracts, these initial sales will evolve into much larger contractual arrangements as further SenSen systems and solutions are upsold to customers.
Annual recurring revenue (ARR) from existing customers, new contracts and expected upsells and cross-sells to existing customers in North America is likely to help SenSen reach a minimum revenue in the vicinity of A$3 million for the 2023 financial year from North America alone.
This represents a 33% increase on the current year’s revenue of A$2.4 million.
SenSen’s US and Canadian subsidiaries’ earnings have benefited from favourable exchange rate movements against the Aussie dollar over recent months.
On the cost management side, earnings in US dollars are also facilitating material cost of goods sold (COGS) and some hosting services are being directly paid in US dollars across the company.
US potential
SenSen’s recent contract wins in the US include deployments in Illinois, California, Pennsylvania and Oklahoma.
The sales traction in the healthcare and education sectors has used SenSen's analytics platform to gather data from a network of widely dispersed sensors, hospital and university asset managers.
The company sees great potential for the land-and-expand strategy in these vertical markets in the US.
CEO Dr Subhash Challa said: “SenSen’s targeted North American sales and marketing activities over the last 12 months are bearing fruit with these multi-year contracts with new customers.
“As seen with all SenSen’s customer base, the real lifetime value of these customers will be many times the initial contract size, as we continue to deliver world-leading sensor AI solutions and develop new innovations to upsell.
“North America is a key growth market for SenSen’s drive towards cash-flow positivity and profitability and we look forward to contracting further new customers over the coming months.”