Tantalus Systems (GRID) Investor Update summary

Financial performance and growth

• Revenue reached a new 12-month high of approximately $52 million, up from $42 million the previous year, driven by strong sales to existing and new utility customers.

• Recurring revenue hit a record $13.5 million annually, representing 24-25% of total revenue, with annual recurring revenue growing over 11% year-over-year.

• Gross profit margins remained robust at 54-55%, with software and services margins at 74% and connected devices margins improving due to lower provisions.

• Adjusted EBITDA improved to $1.2 million for the quarter and $3.5 million for the trailing 12 months, reflecting disciplined cost management and revenue growth.

• Net income for the period was $384,000, a turnaround from a loss of $361,000 in the prior year.

Commercial momentum and product deployment

• Orders converted from the sales pipeline in the first nine months surpassed any prior full year, exceeding $50 million, with further growth expected in Q4.

• 52 utilities have placed orders for the TRUSense Gateway, far exceeding internal expectations for the first year of commercialization.

• Most TRUSense Gateway deployments are with existing customers, representing 70% of the 52 utilities, and are part of broader infrastructure upgrades.

• The aggregate opportunity from these 52 utilities is estimated at over $100 million upfront, with recurring revenue per device exceeding $10 annually.

• Manufacturing capacity for TRUSense Gateway is 150,000 units per year, with plans to diversify contract manufacturing to mitigate risk.

Strategic outlook and operational planning

• Focus is shifting from R&D to sales and marketing as TRUSense Gateway commercialization ramps, with expected expansion in Adjusted EBITDA margin.

• Management is actively planning for manufacturing diversification and risk mitigation, with the ability to set up new lines or partners within 18-24 months.

• M&A strategy prioritizes both accretive financial impact and strategic rationale, targeting technology, customers, and new market access.

• Utilities are increasingly focused on grid modernization due to data center growth and capacity constraints, driving demand for analytics and flexible solutions.

• Product development will continue to evolve based on utility feedback, with near-term focus on data management, analytics, and potential hardware enhancements.