Smart cities solutions provider SenSen Networks (ASX: SNS) has won a $2.5 million contract with the City of Las Vegas for the installation of a licence plate recognition system throughout its jurisdiction.
The five-year contract covers the purchase of two SenFORCE mobile parking enforcement units and 80 Gemineye mobile units for use in the city’s authorised vehicles including cars, Segways and motorised scooters.
It will be the largest commercial implementation of Gemineye by a single SenSen customer since the product was launched 12 months ago.
The contract value will include approximately $638,000 for the systems, software and commissioning, which will be paid in a milestone delivery-based schedule from May to August 2020.
An additional amount of approximately $376,000 will be earned in annual recurring revenue (ARR) and fees for the software licence, hardware maintenance and support services, and paid in equal monthly instalments of approximately $31,000 over the contract term.
The City of Las Vegas hosts more than 42 million visitors each year and is the most densely populated city in Nevada.
It serves as the financial, commercial and cultural centre for the state and has more than 650,000 residents, while the larger Las Vegas metropolitan area has more than 2 million residents.
The city has already invested heavily in smart infrastructure, having charted a course to become a smart city by 2025.
SenSen’s technology will assist the City of Las Vegas to maintain safe, congestion-free roads by automating the enforcement of bylaws associated with regulating traffic and parking on city streets.
Chief executive officer Dr Subhash Challa said the company’s proprietary artificial intelligence and video analytics software helped it win the competitive tender process.
“Las Vegas is a flagship US city and we are excited to be providing our world-leading AI and video analytics expertise in improving the amenity of the its citizens by helping reduce traffic congestion and efficiently manage its parking,” he said.
“We expect our operations will continue to grow in the US as more cities seek ‘smart city’ intelligent transportation solutions.”
The City of Las Vegas contract builds upon SenSen’s expanding footprint in the US following an ongoing collaborative services agreement with Chicago Parking Meters LLC to improve parking space management efficiency within the city.
This month, SenSen reassured the market that its operating strategy will allow for an ongoing, seamless service to customers during sustained disruptions caused by COVID-19.
“Clearly during this challenging period, it has never been more important for cities and communities to function efficiently and deploy assets equitably, and [we are] continually finding new ways to do this,” Dr Challa said.
“Our clients have stable budgets and long-term strategic outlooks [and] we are confident they will emerge from the pandemic at some stage … we are managing our resources to be with them side by side when they do.”
Operationally, SenSen’s “robust” business model is delivering ARR via locked in multi-year contracts from several blue-chip customers.
The company reports its total ARR value from existing customers has increased year-on-year and will exceed a record $4 million from the 2021 financial year.
“This is a significant shift, both in the type and quantum of revenues, all originating from government and blue-chip enterprise customers,” Dr Challa said.
“We are fortunate to work with sound organisations – city councils, road authorities and other government clients – who have signed up to multi-year contracts.”
The company has cut costs by approximately 35% across its operations to make itself cash flow neutral, assuming cash receipts only from its recurring revenue base and an annual research and development grant.
“The board has made a decision to be ultra-conservative with forward planning and has removed all new contracts [we are] anticipating to win out of budgets and internal cash flow models, including new government tenders and beta trials which were almost finished,” Dr Challa said.
At midday, shares in SenSen were 22.86% higher at $0.086.