1Spatial Holdings Company Research (SPA)

1Spatial’s FY25 trading update indicates that the company’s transition to a higher-margin, recurring software business continues to make solid progress, with term licence and SaaS revenues up over 35% y-o-y to £11.5m. Delays to a large, lower-margin services project suppressed total revenues (£33.4m vs Edison’s estimate of £35.8m), but the improved mix means that EBITDA of ‘at least £5.6m’ is essentially in line with our £5.7m estimate. FY26 has started positively and hence our FY26 revenue and EBITDA estimates remain unchanged, with continued software and SaaS growth driving faster growth and margin expansion. Higher interest costs reduce FY26 EPS by 10%. We continue to believe that the opportunity for 1Spatial with 1Streetworks and in the US is far from being priced in, with further deal flow being the key catalyst for upside.