Recurring Revenues from Remote Power Control and Management
In Sophic Capital’s The Next Revolution – Wireless Smart Off-Grid Technology report, we:
- Introduced Sophic Capital client Clear Blue Technologies Inc. [TSXV:CBLU, OTC:CBUTF], a provider of clean, wireless power, off-grid solutions;
- Detailed Clear Blue’s extensive data collection capabilities that consistently improve the Company’s products and services;
- Outlined competitive advantages that Clear Blue’s wireless, off-grid systems have over incumbent solutions, and;
- Highlighted drivers that could cause Clear Blue’s sales to rapidly scale.
In this report, we discuss Clear Blue’s revenue model and highlight the Company’s customer base.
Well Positioned to Continue to Scale the Business
Before delving into how Clear Blue generates revenue, let’s highlight the Company’s management team that has demonstrated continued success in scaling the business. Clear Blue’s management has over 100 years of combined experience in the engineering, technology, and power sectors. Co-founder and CEO, Miriam Tuerk is a serial entrepreneur and business visionary with a proven track record of creating, selling, and delivering innovative products and services. Co-founder and Chief Power Officer, John Tuerk, drives product strategy and development for all power, solar and lighting application. Co-founder and CTO, Mark Windrim, is responsible for developing the communications network and the cloud Smart Off-Grid control and analytics platform. The remainder of the management team oversee finances, business development, and engineering solutions.
Hardware Sales in a Growing Market and Recurring Revenues for Wireless Power Management and Control
Clear Blue delivers the technology to manage and control wireless off-grid power systems, generating a mix of one time and recurring revenue. The Company generates one-time revenue through hardware sales and recurring revenues through its Energy-as-a-Service (EaaS) management and control service offering. One-time hardware sales come via Clear Blue’s Smart Off-Grid Controllers, Nano-Grid Power Pack systems, and Illumient solar-powered street lighting. EaaS generates recurring revenue for Clear Blue, driven by Illumience cloud-control, a wireless power management and control service that remotely optimizes solar/wind power generation, storage, and consumption. Since Clear Blue’s technology is smart (i.e. software driven), it evolves and improves, continually benefitting all customers. Therefore, as the next generation or version comes out, customers can capitalize on solar and battery energy performance improvements, further optimizing their remote operations and investment in Clear Blue’s solutions.
Clear Blue has diversified its revenue streams globally and vertically, with continued growth in North America (clean energy), Africa (telecom) and globally for EaaS as these industries expand in these regions. Clear Blue is the market leader in its respective verticals: Smart-City Streets, Telecom cell phone towers, and Satellite Wi-Fi (early orders for new product expected in 2022). Beyond the three main verticals, Clear Blue’s solutions also have use cases that address security, IoT, and other mission-critical systems. Geographically, the Middle East and Africa (MEA) are the largest revenue contributors over the past 4 quarters (88%), followed by the United States (10%) and then Canada (2%).
Global Customer Validation
Clear Blue Technologies’ CEO Miriam Tuerk has noted the Company’s $450 million pipeline across the 37 countries where the Company operates, we believe this pipeline is built upon an impressive client list. The Company’s customers can be found across all levels of the public sector and private industry (Exhibit 1). From little towns to big cities and amongst small business to multi-national corporations, Clear Blue’s solutions have wide adoption across several markets and leaders within those markets.
Exhibit 1: Some of Clear Blue Technologies’ Customers
MEA, which provided 88% of Clear Blue’s revenues over the past 4 quarters, presents a large opportunity for wireless off-grid power management systems, and Clear Blue has demonstrated its ability to sell to major brands in the region. Some of the Company’s notable customers in this region include:
- NuRAN and Clear Blue sign an agreement to provide Rural Telecommunications systems and ongoing operational services in Cameroon to Orange. The agreement calls for Clear Blue to provide NuRAN with over 1,333 Smart Off-Grid power systems for its Orange DRC service. The contract could be worth C$8 million to C$10 million over the next three years, with a minimum of C$750,000 to ship this year, according to management commentary on the Q2 2021 earnings call on August 16, 2021. This initial amount had already been exceeded according to the Q3 MD&A reported on November 16, 2021.
- One of the world’s leading telecommunications infrastructure operators selected Clear Blue Technologies’ Smart Off-Grid Power Systems to power an initial 400 towers in Africa, an initial contract worth about C$5 million. The customer plans to expand this initial deployment to 2,000 sites across rural Africa over 2 years, which could provide Clear Blue a large growth opportunity.
Clear Blue Technologies also partnered with Parallel Wireless to deploy a countrywide telecom network for a telecom operator in Africa. The initial phase is worth about CAD$750,000 with 2 additional phases planned in 2021/2022, both of which are larger than phase 1. Parallel Wireless a global leader in OpenRan (Open Radio Access Networks — the idea of interoperability of open hardware, software, and interfaces for cellular wireless networks) and competes against Huawei.
“Clear Blue’s Smart Off-Grid technology with its unique and critical predictive analytics capabilities, offers the lowest up-front cost, lower ongoing costs and the best power availability due to its remote monitoring and power management services.”
Francis Letourneau CEO of NuRAN
Beyond MEA, Clear Blue has also won projects in North America:
- Clear Blue has a history of completing Smart Off-Grid lighting projects for various Business Improvement Associations (BIA) across Toronto. Clear Blue has so far completed five projects with Toronto BIAs and continues to prove Smart Off-Grid is the best solution for mission critical infrastructure.
- In 2018, the North Dakota Department of Transportation announced a state-wide initiative to reduce traffic accidents through clean tech Smart Off-Grid lighting. A vital component in reducing traffic accidents was bringing lighting solutions to rural intersections across the state; however, these rural intersections were too far from some districts’ electrical grid infrastructure. Clear Blue Technologies’ Smart Off-Grid Illumient lighting solution were employed to provide the Smart Off-Grid solar power for these rural lights.
- Clear Blue is seeing an uptake of solar off-grid lighting in a variety of industries that are looking to increase safety, resilience, and security. In partnership with Metro-Tech Sales & Consulting, Inc., Illumient solar lights were provided to illuminate safety switches in a Conrail operated switchyard in Greenwich County, New Jersey in January 2020. Ensuring reliable lighting of the railroad switches without connection to the grid was a key requirement for this project.
In our next report, we’ll detail Clear Blue Technologies’ vertical and geographical markets and discuss some of the Company’s opportunities, in addition to taking a look at the Company’s books, revenue and margins.
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