reports
- Richard Williamson
Expert.ai - Growth in focus areas
Expert.ai reported 11% y-o-y revenue growth in H121, and as a result of the focus on product development and strengthening the sales and marketing function the EBITDA loss widened to €7.0m from €4.6m in H120. We maintain our forecasts for FY21, which assume similar seasonality to previous years. The planned shift in listing from AIM Italia to Borsa Italiana should widen the potential investor audience for expert.ai and improve liquidity.
- Richard Williamson
Expert.ai - Growth in focus areas
Expert.ai reported 11% y-o-y revenue growth in H121, and as a result of the focus on product development and strengthening the sales and marketing function the EBITDA loss widened to €7.0m from €4.6m in H120. We maintain our forecasts for FY21, which assume similar seasonality to previous years. The planned shift in listing from AIM Italia to Borsa Italiana should widen the potential investor audience for expert.ai and improve liquidity.
- Richard Williamson
Expert System - Focus shifts to scaling up
The first year of Expert System’s five-year plan ‘Path to Lead’ was essentially a year of investment, and despite the disruption caused by the pandemic, the company made good progress meeting key funding, product, marketing and hiring milestones. Management is maintaining its financial projections for the plan for FY21–24, which calls for modest growth this year, followed by accelerating growth in FY22–24, and positive EBITDA from FY23. We have made small changes to our forecasts for FY21 and FY...
- Richard Williamson
Expert System - Laying the foundations for growth
Expert System’s H120 financial results were affected by COVID-19 restrictions and the start of investment in the company’s new five-year growth plan. So far in H220, the company is making good progress in executing this plan, with funds raised to support the required investment and technology development on track to launch the new end-to-end SaaS platform in Q121.
- Richard Williamson
Expert System - Fund-raising target achieved
Expert System has met two key milestones in the execution of its new five-year growth plan, raising €25m from the issue of 9.26m shares at €2.7 per share and launching expert.ai, its NL API (natural language application programming interface). The first supports the investment required to execute the plan and the second is the first stage in the development of the cloud platform.
- Richard Williamson
Expert System - Five-year growth strategy unveiled
Expert System has unveiled an ambitious five-year plan to become the market leader in natural language artificial intelligence (AI) and to achieve annual revenues of €100m by FY24 (CAGR 24%). Investment in R&D and sales & marketing to develop and drive awareness of the SaaS platform is expected to be funded through a capital raise of c €25m in the next few months. Successful execution of the plan could see the stock valued at €5.4 per share, although it is likely to take some time to reach...
- Richard Williamson
Expert System - More funding for international expansion
A recent fund-raise generated gross proceeds of €3m for Expert System and added two new investors to the shareholder register. The company intends to use the proceeds to support its international expansion plans, primarily in the US. It recently announced a partnership with SDL to increase multilingual support.
- Richard Williamson
Expert System - Focused on international growth
Expert generated sales growth of 10% in FY19, slightly below guidance, and reported EBITDA at the midpoint of guidance. The company made good progress in shifting to subscription licensing (76% of licences sold) and reported its first sales via channel partners, which made up c 10% of sales. Reflecting the potential for COVID-19 to delay projects and new business, we have revised down our FY20 forecasts and assume an acceleration in revenue growth in FY21.
- Richard Williamson
Expert System - ADmantX stake sold for €7m
Expert System has sold its 60.8% stake in ADmantX for cash proceeds of €7m. ADmantX is a spin-off that has adapted Expert’s Cogito technology for the advertising industry. The disposal price reflects a trailing EV/sales multiple of 8x, well ahead of Expert’s trailing multiple of 4.1x. In our view, the deal highlights the value of Expert’s technology as well as providing welcome funds to support the growth of the business.
- Richard Williamson
Expert System - Accelerating investment in growth
While H119 revenues were slightly below those reported a year ago, Expert System is confident of meeting revenue expectations for the full year, which imply year-on-year growth of 13%. Management is using the funds raised in April to accelerate investment in sales and support. Although this reduces our EBITDA forecasts for FY19 and FY20, it should lead to stronger revenue growth in the medium term as the company takes advantage of the strong interest in the practical application of artificial in...
- Katherine Thompson
Expert System - Better visibility
Expert System’s FY18 results were in line with guidance set a year ago, confirming that revenue growth approaching 10% was not at the expense of profitability. Management is maintaining its targets for FY19, expecting revenue growth to accelerate to 15–20% as the market for cognitive computing becomes more mature. The strong FY18 performance gives us confidence in Expert’s ability to achieve FY19 targets. If this strong revenue and profit momentum can be maintained, the stock looks attract...
- Katherine Thompson
Expert System - Making good progress towards growth targets
Expert System’s H118 results confirmed year-on-year sales growth of 52% and positive EBITDA. Over the last year, the business has seen strong demand for subscription licensing, resulting in recurring revenue increasing to 50% from 38% in H117. Management remains confident of meeting its FY18 guidance and we make minimal changes to our forecasts. Continued progress towards growth and profitability targets should support share price upside.
- Katherine Thompson
Expert System - Strong H118 sales support FY18 targets
Expert System’s H1 trading update confirms that it generated year-on-year sales growth of more than 50% in H118 to €12.9m. Management confirmed that this is in line with its growth plan (sales growth of 9-15% y-o-y for FY18). We maintain our forecasts; full H118 results are due to be published on 28 September.
- Katherine Thompson
- Slower pipeline conversion
Expert saw a slower than expected trading environment in H117 combined with a shift in the mix of revenues towards subscription licensing. Post period end, the company signed a deal with Lloyd’s of London, reinforcing its position in the insurance vertical. Management now expects flat revenues in FY17, effectively pushing out its three-year industrial plan by a year. We have revised down our revenue and EBITDA forecasts for FY17 and FY18, shifting EBITDA profitability into FY18.
- Katherine Thompson
Turning the AI hype into reality
Expert System spent FY16 investing in its corporate structure post the TEMIS acquisition. While this led to a small loss in FY16, it leaves the company better positioned with a unified technology offering and offices established in the key growth markets. New business in H216 confirmed that these changes are starting to have a positive effect. Converting the increasing interest in Expert’s cognitive computing solutions into new business should support strong revenue growth and a return to profit...
Ford Equity International Rating and Forecast Report
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
- Katherine Thompson
Building the foundations for growth
The focus on integrating the TEMIS acquisition slowed the pace of customer wins in H116, resulting in a dip in revenues and EBITDA. With this integration largely complete, we expect a better rate of new business wins in H216. We have reduced our forecasts to reflect H1 performance and incorporated the recent fund-raising. The company continues to focus on evolving the product, developing indirect sales channels and building the business in the US.
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