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Independent Reviews for Venture Investors

GRID: Tailwinds.


Tantalus Systems (GRID.TO) transforms aging one-way grids into multi-directional grids to improve the efficiency, reliability and sustainability of public power and electric cooperative utilities and the communities they serve.


Source: Tantalus Systems Inc.


Tantalus solutions are purpose-built to allow utilities to restore power quickly after major disruptions, adapt to rapidly shifting consumer expectations, innovate new solutions for distributed energy resources, and evolve grid infrastructure at their own pace without needless cost or complexity. Tantalus is committed to giving its user community the flexibility needed to get the most value from existing infrastructure investments while planning for future requirements.



GRID's generates revenue from hardware (connected devices), professional services and software.


Coverage was initiated April 2022. Below is an update.


News Releases


Apr. 28 - Kandiyohi Validates Integration of Tantalus’ TUNet Technology with Neptune’s R900 System Data: Kandiyohi Power Cooperative has deployed and validated the capability of the Tantalus Utility Network (TUNet®) to capture, integrate and present consumption and flow data from licensed Neptune R900® water endpoints.


Kandiyohi has partnered with the City of Olivia, MN, which had previously invested in water system automation by deploying R900 RF water endpoints that were being read monthly via a drive-by data collection solution.


By leveraging the TRUScan™ capability embedded within Tantalus’ TUNet smart grid platform, which uniquely enables utilities to access and enable data from a diverse set of endpoints that rely on different protocols across one smart-grid network, Kandiyohi has demonstrated the ability to integrate smart meter data along with daily water consumption and critical alarm data from the city’s deployed Neptune R900 endpoints. As a result of the successful validation, it is able to provide a path to a more resilient, digitized distribution network at a fraction of the cost of a stand-alone full deployment.


May 10 - Reports Financial Results for Q1, 2022:


The Company continues to anticipate growing revenue year-over-year by 20% to 25%, targeting approximately $38.6 to $40.2 million in 2022. This guidance includes revenue contributions from the recent acquisition of Congruitive.


June 10 - Announced Voting Results from the Annual General and Special Meeting.


June 14 - Publishes Inaugural ESG Report: The inaugural ESG Report covers the period ending December 31, 2021, and highlights the ways in which Tantalus is working to create a sustainable and equitable future.


Aug. 9 - Report Financial Results for Q2 2022


Sep. 6 - Delivers 3 Millionth Intelligent Endpoint to Public Power and Electric Cooperative Utilities: with its integrated TRUEdge® computing modules to public power and electric cooperative utilities. This milestone is significant in the evolution of modernizing distribution grids of community-oriented utilities. These connected meters with TRUEdge computing modules serve as the backbone of a digital network that improves a utility’s resiliency.


Through these 3 million connected meters, Tantalus is gathering more than 30 billion data points annually that provide visibility into evolving power consumption patterns and corresponding power quality measurements from the edge of the grid. By feeding the “data of power” from the edge of the grid into advanced software applications and AI-enabled data analytics, Tantalus’ customers gain real-time situational awareness to improve their system planning, protect substation, distribute assets, respond to emergencies, and optimize the efficiency of their grids.


These connected devices are also capable of reading multiple communication protocols to support an increasing number of initiatives across water and gas departments of multi-commodity utilities.


Oct. 25 - Crow Wing Power Leverages Tantalus for EV Charging Program: Crow Wing Power is utilizing its TUNet® smart grid system to offer customers a choice of two electric vehicle (EV) charging options. The cooperative electric utility, based in Brainerd, Minnesota, replaced its aging meter network with a Tantalus TUNet smart grid platform for advanced metering infrastructure (AMI) and load management applications.


In working closely together with Crow Wing Power to meet their objectives, Tantalus expanded its load management solution to target larger residential load profiles exceeding 30 amps, such as electric heating systems, electric water heating and EV charging stations. By providing enhanced load control capabilities across an AMI network, the utility can incorporate specific load management programs and verify results by accessing more granular data.


Nov. 9 - Reports Financial Results for Q3 of 2022:


Summary


Milestones

Four milestone events were highlighted via news release in the last nine months.


April 2022, the validation of the integration of Tantalus’ TUNet Technology with Neptune’s R900 System Data by Kandiyohi Power Cooperative was reported. Kandiyohi deployed the capability of the Tantalus Utility Network (TUNet®) to capture, integrate and present consumption and flow data from Neptune R900® water endpoints.


In 2021, Tantalus announced a license agreement with Neptune to integrate their water endpoints onto TUNet, thereby expanding the total available public power market for Tantalus’ solutions,” - President & CEO of Tantalus.


June 2022, Tantalus published its Inaugural ESG Report. This is an important tool for attracting institutional investors.


September 2022, Tantalus announced the delivery of 3 Millionth Intelligent Endpoint to Utilities. As a result, Tantalus reported gathering more than 30 billion data points annually which provide visibility into evolving power consumption patterns and corresponding power quality measurements from the edge of the grid.


By feeding the “data of power” from the edge of the grid into advanced software applications and AI-enabled data analytics, Tantalus’ customers gain real-time situational awareness to improve their system planning, protect substation and distribution assets, respond faster to emergencies, optimize the efficiency of their grids.


October 2022, Tantalus reported on Crow Wing Power EV's Charging Program. After having replaced its aging meter network (60,000) with a Tantalus TUNet® smart grid platform for advanced metering infrastructure (AMI) and load management application last year, it is now utilizing its TUNet® smart grid system to offer customers a choice of two electric vehicle (EV) charging options.


Implementing TUNet AMI, Tantalus Load Management System, and Tantalus Load Champ, Crow Wing Power offers an attractive time-of-use rate and an even better off-peak rate that automatically shifts charging to overnight. This lets Crow Wing Power manage load more effectively across their distribution system and gives members options.


Earnings

Overall, Tantalus continues to deliver consistent revenues with relatively stable net losses.

YTD 2022, revenues were up by 12% but net losses were also up by 10%. At the Q3 2022 earnings call, Tantalus maintained its guidance of a 20% revenue growth over FY 2021. This means roughly $38.5M for FY2022 or $11M in Q4 2023. While gross profit numbers continue to be solid, the current cash balance has been declining in FY 2022.


Insiders

Insiders activity at Tantalus continues to be impressive.

Source: CEO.ca


In short

According to the December 2022 Investor Presentation, Tantalus (GRID) has now over 265 utility customers and is targeting revenue between US$38.5- $40M in FY2022 including an annual recurring revenue (ARR) of US$9M (>20%).


YTD 2022, Tantalus generated $27M and would require $11M in revenue in Q4 2022 to bridge the gap. Overall, GRID's management appeared confident that it would meet their objectives and restated guidance at Q3 2022 earnings..


"While revenue grew in the quarter, we did not meet our internal expectations due to production delays. We are pleased, however, to demonstrate 12% growth during the first nine months of the year ended September 30, 2022 and are reaffirming our guidance to deliver at least 20% revenue growth in 2022," - President & CEO of Tantalus


In addition, Tantalus shareholders are mostly institutions (85%). A price target of $2.32 cents (consensus) is reported from various brokers covering the company, namely: Beacon, Canaccord, Cormak, Paradigm, and PI Financial.



Exploring multiples suggests that Tantalus is undervalued relative to comparable companies. This is certainly an opportunity. However, it may be that current valuation is influenced by the awareness of the company by the market.


In total, asides from the earnings only four official news releases in the past nine months were milestone related. Here, Tantalus can probably make some improvements. Perhaps that awareness will in turn influence multiples.


Otherwise, the impact of extreme weather events, along with the "electrification" and "decarbonization" trends continues to be drivers for modernizing the grid. Hence, Tantalus is well positioned with numerous tailwinds.


DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.

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