IKE GPS Group (ASX:IKE) said three new products are due to reach the market in the second half of this financial year and are expected to support further annual recurring revenue (ARR) growth after the company reported a strong three-month period to June 30, CY26.

The platform technology company reported an annualised exit run rate (ERR) of subscription revenue of about $22 million, up 31% from the prior corresponding period. That growth is significant for a business whose revenue mix is increasingly centred on software subscriptions, even as one-off and lower-margin services revenue softened during the product transition.

For the quarter, platform subscription revenue came in at NZ$5.3 million, up 27% from the prior corresponding period, while gross margin improved to 82% from 75% in the prior corresponding period.

Total revenue for the quarter was about NZ$6.4 million, broadly flat compared with the prior corresponding period, reflecting some interim softness in one-off and lower-margin services revenue as products were brought to market.

Chief executive and managing director Glenn Milnes said IKE was funded in CY25 to invest in new products and AI-first technology, and that the timing for the product launches remains on track for the second half of this financial year.

“The first module of our next generation platform is focused on make-ready engineering which automates and improves how power utility distribution networks are designed for new capacity and attachments to networks,” Mr Milnes said.

“Our second new product takes IKE beyond structural analysis and engineering design into the management of the electrical delivery side of distribution grid management; we have built this with a customer council that includes the standards directors from many of the largest electric utilities in the U.S.

“Our third new product creates a solution for structural analysis tailored for communications companies that are deploying fibre.”

Mr Milnes also said the company is investing in artificial intelligence to build competitive advantage.

“We have continued to actively invest and deploy AI across IKE both in our internal business processes and inside our products,” he said.

“AI is an enabler that can accelerate our growth and gives IKE the capability to rapidly enhance our products and user experience, as evidenced by the recent PolePilot launch that enabled a 10% price increase within IKE Office Pro.

“In 1Q we launched a proprietary AI platform called IKE Vitruvius. This has been deployed internally across our software development, product, and sales \u0026 marketing teams, running customer specifications, field operations procedures, and software engineering delivery every day. This has now executed over 200 plans.

“The reason AI compounds advantage rather than eroding it comes down to three things: IKE’s proprietary data — more than 20 million real-world utility assets designed by engineers in our database — that we believe very few of our electric utility customers are going to build this software themselves, and the speed with which we can fold new AI capability into our own industry-specific workflows.”

IKE was unchanged at 95 cents, with a market capitalisation of $184.4 million before the open.

The material in this article is for information only and should not be treated as investment advice. Readers are encouraged to do their own research and consult a certified financial adviser before making any investment decisions.