Windward wins another contract after positive year
By Josh White
Date: Thursday 12 Jan 2023
(Sharecast News) - Maritime artificial intelligence (AI) specialist Windward described a year of positive momentum in a trading update on Thursday, with its annual contract value as at 31 December rising 20% to $25.5m.
The AIM-traded firm said that was driven by new customer wins, including long-term contracts with "some of the largest participants" in maritime trade, as well as expansion with existing customers.
It said its strategic focus areas of US government and commercial segments performed "strongly", growing annual contract values at about 40% each through the year.
The rest-of-world government segment growth of 2% was below management expectations and was impacted by higher churn and one contract renewal for $1.3m per annum, deferred into 2023, negatively affecting overall 2022 revenue and EBITDA.
"As a result of the strong growth in US government and commercial, including some multi-year contracts, these segments now account for more than 50% of annual contract value, demonstrating the company's successful execution of its stated customer diversification and growth strategy and the accelerating appetite for Windward's platform across the broader maritime industry," the board said in its statement.
The company said it was expecting to report revenue growth of 23% in 2022 to $21.3m, and an EBITDA loss of $12.2m, widening from $8.6m, as a result of investment in headcount to support research and development, and sales and marketing.
"These investments have resulted in the successful launch of three new offerings and capabilities - Ocean Freight Visibility, API Insights Lab and Vessel Fuel Consumption API - and collectively have driven considerable growth in customer numbers to over 130.
"This expanded customer base provides a strong platform for growth and reduces customer concentration."
Windward said it remained well-capitalised with net cash of $22.2m at year-end, "significantly more than required" to meet expected costs.
The firm said it was entering 2023 in an "enhanced strategic position", due to its expanded offering, capabilities, broader customer base and supportive market drivers.
Having largely completed the planned investments outlined at the time of its initial public offering, and in light of the current, "challenging" wider economic climate, the firm said it believed it was prudent to maintain its cost base in 2023 at its 2022 level, and had taken cost reduction action across its operations, seeking to become cash flow positive and to reach EBITDA breakeven earlier than previously stated, in 2024.
The board said it believed that the expectation for real-time, accurate insights to manage maritime risk was "greater than ever".
Supported by the company's strong cash position, Windward said it remained focussed on growing its revenues and customer base, while managing costs as it accelerated its path towards profitability.
Windward also announced a three-year enterprise contract win on Thursday, signed in late 2022, with "one of the world's largest" publicly-traded international oil and gas companies.
The unnamed customer would use Windward's solution to enhance its due diligence and streamline trade compliance processes, enabling it to conduct business as usual in the current, "precarious" oil trading ecosystem in light of the recently-implemented Russian crude oil price cap.
Alongside Shell and BP, the customer would become the latest blue-chip energy firm to use Windward's platform, validating the application of the company's solution within the maritime market.
"2022 has been another year of considerable operational and financial progress for Windward, with fantastic annual contract value growth in our commercial and US government customer segments, which we expect to be the growth engines for the business moving forward," said co-founder and chief executive officer Ami Daniel.
"Today's announcement of a major contract with one of the world's largest companies supports our belief in the potential for our platform across the maritime supply chain."
Daniel said that moving into 2023, the firm's mission to become "the leading decision support platform" for real-time maritime data intelligence through "ground-breaking technologies" remained unchanged.
"The increasing risks in maritime trade presented by the war in Ukraine and ongoing supply chain delays are fuelling demand for our offering and we are confident we have the right team and technology in place to capture this significant opportunity."
At 1237 GMT, shares in Windward were up 2.61% at 59p.
Reporting by Josh White for Sharecast.com.
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