Release Date: August 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Windward Ltd (LSE:WNWD, Financial) reported a 37% year-over-year revenue growth.
- Margins have surpassed 80% for the first time.
- The company has launched MAI Expert, a generative AI product, which is expected to drive future growth.
- Annual Contract Value (ACV) grew by 35% year-over-year.
- The company has a highly scalable subscription model with 99% SaaS revenue.
Negative Points
- The US government segment showed slower growth due to budget issues.
- The company is still operating at a loss, although the EBITDA loss has been reduced by 66%.
- There is a dependency on geopolitical tensions and sanctions, which could impact future growth if resolved.
- The company faces challenges in integrating new data sources and maintaining data accuracy.
- Partnerships have not yet significantly contributed to ACV growth.
Q & A Highlights
Windward Ltd (LSE:WNWD) Earnings Call Highlights
Q: How big is the Ocean Freight Visibility offering now, and how big could it get?
A: Ocean Freight Visibility currently accounts for about 10% of our commercial revenue. It has significant growth potential, given the large number of ocean freight forwarders and shippers who would eventually need it. We are also working on exciting generative AI products in the logistics space to build on this base.
Q: How do you feel about the upcoming US government renewals, especially in light of elections?
A: We don't expect any bad surprises with the US government renewals. The current year's budget is already approved and being executed. The election year might impact next year's budget, but not this year's renewals.
Q: What is your focus for investments in the second half and beyond?
A: Our primary investment focus is on product development, particularly around generative AI (GenAI). We are also investing in sales, but the bulk of our investment is directed towards new product offerings related to GenAI.
Q: What is the effect of partnerships on your ACV growth?
A: While partnerships have not yet contributed significantly in dollar terms, they are crucial for future growth, especially in the supply chain area. Partnerships with large companies like LSEG are progressing well, although they take time to develop.
Q: How do you tailor your offering to different customers and segments?
A: We don't tailor offerings as a project company would. Instead, our product team is organized by customer segments (supply chain, public sector, trading and shipping). These teams work closely with customers to understand their needs and iterate on our product roadmap accordingly.
Q: How do you assess Windward's dependency on conflicts and sanctions?
A: The world remains unstable, which drives demand for our compliance and security solutions. However, we are also expanding into operational areas to reduce dependency on conflicts and sanctions.
Q: Do you see the necessity for Windward to venture into maritime data collection?
A: We are open to both buying and collecting data. For example, we are building our own ownership database. We will continue to onboard new data types to enhance our generative AI products.
Q: How has the response been to your newly launched GenAI offering, MAI Expert?
A: The response has been positive, with both new and existing customers signing up. MAI Expert is an add-on that provides significant ROI for customers and helps them automate workflows. It also serves as a thought starter for further GenAI applications.
Q: Is GenAI a major chunk of your R&D investment for 2024?
A: Yes, GenAI is becoming increasingly significant in our R&D investments. However, we continue to invest in our platform and other products as well.
Q: What will drive the next leg of growth in H2 versus H1?
A: The second half is typically strong for government business due to budget cycles. Commercial growth continues to be robust. New GenAI product capabilities will also drive growth by expanding our market reach and product offerings.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
