Seven things every investor needs to know about SenSen
With its claim that the business is ‘solving the impossible’, Edison research client SenSen Networks uses AI to find patterns and detect potential issues in live real-world camera feeds.
For a complete insight into the business, please read Edison Investment Research’s full initiation note. Or, for a high-level overview, here are the seven things we think every investor should know about the business:
#1: SenSen’s platform turns 3D data into insights
The company’s SenDISA technology fuses inputs from cameras, GPS, lidar and other sensors. It then applies AI to solve real-world problems. The platform is already being used to fight fraud, detect theft and manage parking, traffic flow and infrastructure. More use cases are under development.
#2: Revenues from multiple geographies and vertical markets
SenSen’s deal flow has accelerated over the past six months and new clients have brought new uses. An Australian is using the tech for environmental mapping, Chicago has deployed it for parking meters, while Sunshine Coast is using it for parking. The Hippodrome Casino in London and Crown Melbourne casinos are using it to detect fraud.
#3: The total addressable market is very untapped
Smart cities, retail and gaming are three sizeable global markets. The company’s current customer base barely scratches the surface of this opportunity but, with a growing number of reference clients, Edison Investment Research expects further growth. The recent Scancam acquisition opens up a large, adjacent vertical, involving monitoring fuel stations to reduce theft.
#4: ‘Land and expand’ strategy provides further opportunities
According to management, SenSen enjoys net retention rates of 110–120%. These are supported by low churn and the successful upselling of more extensive deployments and/or additional use cases.
#5: Few direct competitors
There are not many competitors in the market, with only one listed peer (SenseTime).
#6: Annual recurring revenue grew by 33% to A$2.7m in FY21 – Edison forecasts % growth in FY22
The acceleration in annual recurring revenue demonstrates SenSen’s success in transitioning to a SaaS business model, with a significant portion of contract revenue now coming from recurring, higher-margin revenues.
#7: Trading at discount to slower-growing peers
SenSen’s stock is trading at a discount of 34% despite being forecast to grow faster than its peers. It is also worth noting that investors seem to be pricing in a growth rate of 5% or less for SenSen, considerably less than the AI market, which currently has through 2025 (according to Tractica).
Thank you for reading about SenSen. If you would like more information, please visit the company’s profile page here.
SenSen Networks is a client of Edison Investment Research.
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