1Spatial, a leading geospatial software company based in London, announced a pretax loss for the first half of fiscal 2024. Despite experiencing revenue growth, the company attributed the loss to increased technology spending and higher costs.
Financial Overview
For the six months ended July 31, 1Spatial reported a pretax loss of £456,000 ($558,098), a significant decline from the £267,000 profit recorded during the same period the previous year. However, the company did see a positive 11% increase in revenue, which totaled £15.5 million. This growth was supported by a rise in recurring revenue, which climbed from £6.6 million to £8.2 million. The increase in recurring revenue can be attributed to a successful switch in the company’s business strategy, focusing on long-term contracts rather than one-off perpetual licenses.
Factors Impacting Earnings
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which excludes exceptional and other one-off items, decreased from £2.0 million to £1.7 million. This decline can be attributed to investments in sales resources, increased costs, and foreign exchange movements.
Outlook
Despite the pretax loss and decreased adjusted EBITDA, Chief Executive Claire Milverton remains confident in the company’s future performance. Milverton stated, “The group’s achievements over the past six months demonstrate that our investments in our product and business development teams are translating into growth. We envisage that these investments will lead to further growth throughout the remainder of the financial year and into next year.”
The board of 1Spatial is optimistic about meeting market expectations for the full year. The recent revenue growth has provided financial support for the successful development and launch of two high-margin software-as-a-service products in late 2022.
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