Tantalus Systems Holding (OTCPK:TGMP.F) 2025 Conference Transcript

Summary of Tantalus Systems Holding Conference Call Company Overview - Company Name: Tantalus Systems Holding - Ticker Symbols: GRID (Toronto Stock Exchange), TGMP.F (OTCPK) - Location: Vancouver metropolitan area, Canada - Employee Count: Approximately 150 employees across the U.S. and Canada - Customer Base: Supports over 325 utilities, adding about 20 new utilities annually [2][3] Industry Context - Focus: Technology company aiding electric utilities in modernizing the distribution grid - Market Dynamics: Increasing demand for electricity due to data centers, AI, and electrification of transportation, posing challenges for grid reliability [2][4] - Regulatory Environment: New Canadian administration initiatives may provide opportunities for expansion in Canada [4] Financial Performance - Revenue: Approximately $50 million on a trailing 12-month basis, with 35% from software and services and 25% from recurring revenue [5][13] - Recurring Revenue Growth: 20% compounded annual growth since 2016 [5] - Adjusted EBITDA: Positive adjusted EBITDA reported, with a historical record of 18 consecutive quarters of positive adjusted EBITDA prior to a $15 million R&D initiative [5][6] - Gross Profit Margin: Average gross profit margin of 54% [23] Product and Technology - TruSense Gateway: A new innovation aimed at enhancing grid modernization, providing granular power quality data and enabling utilities to manage demand effectively [5][12][16] - Device Economics: TruSense Gateway sold for approximately $550, with an annual software maintenance fee of about $11 per device [29] - Data Utilization: The device captures data to help utilities manage power supply and demand, enhancing operational efficiency and safety [17][21] Market Opportunities - Utility Sector Drivers: Three main drivers identified: increasing electricity consumption, rising power outages due to extreme weather, and a retiring workforce in the utility sector [10][11] - Automation and Data Analytics: Emphasis on automation to replace retiring engineers and leveraging data analytics for predictive maintenance and operational improvements [11][18] - Long-term Growth Potential: Significant market opportunity estimated in the billions, with a focus on scaling operations and increasing market share against larger competitors [11][28] Strategic Focus - Retention Rate: 99% retention rate over the last two decades, indicating strong customer loyalty [22] - Investment in R&D: Continued investment in R&D to drive innovation and market competitiveness [6][24] - Management Team: Experienced leadership team with a focus on scaling the company and enhancing operational governance [25][26] Conclusion - Current Position: Tantalus Systems is well-positioned to capitalize on the growing demand for grid modernization solutions, with a solid financial foundation and innovative product offerings [28] - Future Outlook: The company aims to achieve adjusted EBITDA margins of 15% to 17.5% as it scales operations and continues to grow its customer base [30][24]