Elsight Limited (ASX:ELS), the recognised industry player in drone connectivity solutions, announced a commercial contract for the ‘Halo’ solution has been signed and a preliminary order received from Speedbird Aero (Speedbird), a renown Brazil–based comprehensive Unmanned Aerial Vehicle (UAV) services provider. Speedbird has built UAV’s capable of transporting and delivering packages for commercial, industrial, and healthcare uses.
How will Speedbird utilize the Halo solutions?
Speedbird’s drones received certification and waivers by ANAC, the Brazilian National Civil Aviation Agency, to operate with ‘Halo’ onboard. ‘Halo’ provides Speedbird with a reliable, uninterrupted bonded connectivity solution for command–and–control (C&C) redundancy certification, secure data transmission, and a complete end–to–end link between the drone and all communication tech associated with Speedbird’s field drone hub and control–centre.
The contract, including a commitment for orders in 2022 followed by the first commercial order of Elsight’s ‘Halo’, has been placed by Speedbird to support their initial fleet of parcel delivery drones. This minimum value for 2022 is $72,000 with potential to reach $520,000 in 2023, subject to expected follow–up orders, 57% of which will be annual recurring revenues.
The terms with Speedbird expire at the end of 2023 with an option to extend. Speedbird is the first customer to be offered Elsight’s business promoting and innovative pricing model for ‘Halo’ which better aligns Elsight’s business model with that of their customers, and how they in turn derive revenue from their customers, while enhancing Elsight’s profitability over time.
This innovative Halo–as–a–Service (HAAS) payment model, applied to Speedbird, represents a shift from reliance on hardware sales to a software and managed services–oriented model which allows Elsight to continue making revenue even after the hardware sale is completed.
What were the executives’ thoughts on the transaction?
This helps Elsight’s clients by reducing up–front payment required for hardware, during their initial service launch, while moderately increasing their monthly recurring revenue payments, received by Elsight during the term of ‘Halo’ usage. Speedbird Founder and President Samuel Salomão commented on the deal with Elsight: “We are happy to work together with Elsight.”
“Halo provides us with the ability to grow our business by providing resilient, uninterrupted long–range communications for C&C between our drones and ground stations, alongside working with us to provide us with a business model which meshes well with the business model we are currently offering our clients, presenting us with another avenue for growth.”
Elsight Chief Executive Officer, Yoav Amitai commented on Speedbird’s decision to choose Elsight: “This contract signature with Speedbird continues to confirm the success of our design–win strategy and the growth implications within the extended drone industry.”
“We are excited to work with Speedbird as they leverage Halo’s connectivity solution, ensuring complete connection confidence to their drone fleet for commercial deliveries.”
“Furthermore, the strong, lengthy partnership formed between Elsight and Speedbird are indicative of Elsight’s relations with numerous other ‘Design Win’ partners1, in all stages of their growth. Just as Speedbird has begun to rapidly expand and is expected to continue their growth exponentially, Elsight looks forward to similar orders with growing scale from additional partners, both large and small, in similar circumstances,” Amitai concluded.