1Spatial Holdings Company Research (SPA)

1Spatial’s FY25 results were in line with the March trading update, with continued robust growth in recurring software revenues offset by weakness in services. We remain confident that 1Spatial is laying the groundwork to deliver sustained operationally leveraged growth and, notably, several new 1Streetworks contracts are in final-stage negotiations. However, near-time decision cycles remain sluggish, which leads us to pare back our FY26 revenue estimate by 7%, with operational leverage resulting in more material reductions in profitability. Even on cautious assumptions, the continuing transition to higher-margin revenues should drive a robust margin recovery in FY27.