Unless you can raise your hand if you'd like to ask a question audibly, and I'll allow you to speak. But Glenn, I'll hand it over to you to get started. Thanks very much.
Great. Thanks, Simon. Thanks everyone for taking the time to catch up, and happy Australia Day. Yeah, pleased to report a strong quarter for IKE, and what we'll try to do here, we've released some data and some information is to walk through slides and relevant information and leave plenty of time for questions.
All right, give me a second. Please take note of this important notice in terms of the data that's being presented. So just from a headline and performance takeaways perspective, there's lots of words on the slide. I will go through them in the charts, but yeah, very solid growth in terms of our exit run rate of annual platform subscription revenue. It's grown to NZD 15.5 million this year. It's up 43% on year on year, and we'll talk a bit more to contracts and recognized revenue profile, gross margin profile.
I think the other thing that investors have been interested in is around the cash and net receivables position. That grew through the last quarter by NZD 4 million. The balance sheet's sitting in a healthy spot. Just from an exit run rate perspective for subscription growth, that's grown significantly. It's based on just the sell-through of our subscription products, clearly IKE Office Pro, but also our next generation IKE PoleForeman product, which we'll talk to in some more detail.
That's been pleasing in terms of year to date. Our subscription revenue growth, sort of following on from that exit run rate metric, again, has just continued to be consistently strong. It's sitting behind a closed contract level of NZD 44 million through the first nine months of this year.
So again, we find ourselves in a healthy position, not just in terms of reported metrics for subscription revenue, but also for a forward look in terms of some of these multi-year opportunities that are sitting in front of us. And it flows through to how we think about subscription seat licenses. This is a slightly, it's not apples for apples. It's in terms of the comparison here, but subs seat licenses has grown 180% through the first nine months of this year.
We've introduced new products where it's all per person per seat subscription licensing, replacing legacy products that were on a maintenance component. But again, it's really healthy. And we're talking about more than 7,000-8,000 now engineers that are subscribed to the platform to do electric utility network design using our software. So it's very sticky software that we ship into the market.
And again, that trend is healthy. It's going to continue to grow. We believe through Q4 and through into next year in terms of subscription growth. So we're in, I think, in good shape on that side of things. Again, think about the revenue flywheel for IKE. We build subscription software. We tie in seat licenses. And as the flywheel goes around, we offer more value-added services and revenue models as these customers come around. It helps us with stickiness.
And one of them is on the transaction side of our business. So we offer our customers help. They use our products and our software to collect infrastructure data. We help them process it, and we call that transaction revenue. So this has been an item that's just kept growing and growing. It really helps us in terms of our footprint in the market.
We had that one big outlier year in FY23, but it's continued to grow in a really healthy manner through FY25. And the gross margin's increasing as we add more efficiency into that business. And this last chart just looks at the overall revenue by segment summary. But you can see that our recurring or reoccurring revenue mix is now sitting at 86% of the total mix, again, which is sort of a healthy position to be in.
So we do expect, in particular, that blue bar to continue to grow in a healthy manner. There's lots of data on this chart. It's not very presentable, but I think the key takeaways in terms of our key metrics. So you can see here how we think about the company in terms of the economic engine that drives the business. Things are tracking positively.
We've increased cash and net receivables by NZD 4 million in the quarter. Our cash position is above the level it was a year ago. We're running at about one new customer every week, and these are big customers. They're big enterprise groups building infrastructure here in the United States, and actually,
we'll talk a bit more about some of the new product momentum through these next slides, so I'll plow through these next items quickly because a lot of this is, I think, familiar to many of the group attending this call. We're just talking about what we do and the market that we're addressing and why it matters, and I think the key thing here is just macro market tailwinds where we are lucky to be in the right place at the right time in terms of North America and the electric utility and communications market.
As a recap, we're headquartered here in Colorado in the United States. Our goal is to deliver the best customer experience and the best brand in our industry. We've got brilliant people. We're very lucky to have a highly talented team. We sell and deliver directly out of our Colorado office, and we think that's a real differentiator in terms of other technology businesses.
From a product perspective, we're seeking to deliver sort of whole-of-network lifecycle assessment and design software tools, so we've got these different products like Insight, IKE Office Pro, IKE Structural, and we offer services. We also offer training and education services to our customers to sort of complete the flywheel in terms of being really sticky and being very valuable to our customers, so our goal is to be the partner that these infrastructure companies can't imagine living without.
That's how we think about our products and our services and how they fit together. The product update. We launched. This is repetition from the last quarter, but it's important because things keep developing. We launched a new IKE Performance distribution network design solution about 13 or 14 months ago. It's quickly becoming the standard for the North American market.
We've already sold through NZD 16.5 million of total contract value to customers, 59 of those. We were converting from a legacy product, but 50 are new. By the end of this year, we expect the financial year, which is to the end of March, we expect other very important customers to close. We will be the standard for distribution network design for eight of the 10 largest electric utilities in North America. There's 3,000 other electric utilities to go and get.
We've targeted the biggest first, and we're going after the rest of them after this point. So that's been a good success story. We're bringing other AI-based and automation products to market. Again, we talked about this last quarter, but things that really matter that are specific to distribution network design, distribution network maintenance and management, and if you think about wildfire risk and you think about storm risk and you think about network resiliency,
this kind of thing really matters over the next decade or two here in the North American market, also in the Australian market in terms of the same kind of factors, so we're building very specific workflows for the distribution power networks and also helping communications companies get their fiber deployed much more quickly. I'll go super fast here, Simon, so we can get to questions. Again, there's some repetition here.
We're lucky to serve a very unglamorous but a massive industry. Power utilities just need to build more capacity, build more resilience in terms of their networks. In this market, North America, there's more than 3,000 electric utilities, a couple of hundred million overhead assets that need resiliency, grid capacity, and just best practice and digitization. That's what we help to support.
It's a big market, and it's growing in terms of the amount of spend that's going into these items. These are billions of dollars in terms of the quantum. And again, we always post this chart because it's important just to understand the scale of the North American market. These are just the investor-owned utilities spread across the U.S. market. It's an enormous market landscape.
Today, we've got some sales footprints in 34 of 106 investor-owned utilities, but we've only scratched the surface in terms of full penetration into these groups, and if you go at a level lower, these are the municipalities and cooperatives. There's 2,800 of these groups delivering power into towns and cities and rural communities. They all represent an opportunity for our products.
We're focused at the big end of town to begin with, but we are progressively working our way into this kind of wider footprint, and they're all meaningful customers in terms of annual recurring revenue when we win them. We're making progress. You've got to have patience and a sense of humor to sell to the electric utility market. These are the most brilliant people in an under-celebrated industry doing very important work, and they take their time in terms of decision-making and how they standardise on software.
But once you get through the door, if you do a good job with people and product, you can be in there for decades and decades. And that's what makes this such an exciting industry to be supporting. And you can see here some examples of customers that we can publicly talk to, but we're in a lot of others now that are the largest electric utilities in the country. It's quite different. There are several hundred fiber companies trying to deploy broadband.
Most of it goes overhead. We help these companies deploy their networks faster. Same products, same software, but we help these folk get onto power poles and power assets just much faster. So another really energizing industry to be supporting. The U.S. is behind a lot of First World countries in terms of deployment of broadband.
There's probably another five to seven years of explosive growth in terms of fiber development here in the United States. Again, we just support these companies to get their networks designed and built much faster. So some examples here around the companies that we support. We're winning logos all the time on the fiber side of our business. But again, we haven't really got started in terms of market penetration.
So I'll just pulse through the rest of it pretty quick, Simon, so we can get to some questions. There's more slides here that have been released today around the market size, market opportunity. Just a view here of what our software actually looks like in practice. This is a view, I think, for Crown Castle in Florida, how they are deploying our software. This is like a whole-of-state view.
You can drill down into every one of these centers or regions to see how they've designed their software around our platform. And clearly, for us, there are multiple avenues now to support growth potential. We're very efficient in terms of sales team expansion and how we're upselling across the industry. We've made three small but effective acquisitions. Two of them, in particular, I think, have paid back particularly strongly. And we're looking at international market expansion, I think, over time. And I'll pause there, Simon, for questions.
Perfect. Thanks, Glenn. Just a reminder, if you did want to submit a question, the Q&A button down the bottom of your screen. But first, we'll go to Paul from Forsyth Barr for a question. Please go ahead.
Thanks, team. And congratulations, Glenn, on the result. And also, obviously, the improvement in cash flow. Solid performance. Three quick questions from me, if I may. You mentioned in earlier updates with regard to the product council sort of you had worked on with Pole Foreman, potentially sort of looking at a new product. Maybe if there's anything more about sort of timing, if there's anything involved with that.
Yeah, thanks, James. There's two parts to that. So the key thing for this industry, we feel, is around creating product-market fit. And it's easy to build a product and hope you can sell it in. What we've tried to do is find the leadership-level people inside of, in this case, 14 of the biggest utilities in the country and ask them what they need next. And we've got some demands now in terms of a next-generation design product. So we've done this two times before. And yeah, there's a requirement to do something additional for them.
We think it can be very meaningful in terms of flow-on subscription revenue for not just this group, but for the whole industry. In terms of timing, we're working our way through that at the moment in terms of we feel very confident in terms of adoption from these groups, but timing is probably the thing that's still work in progress.
Great. Thanks. And just secondly, obviously, Pole Foreman's been an outstanding success. Can you just give us an indication about sort of the number of customers you mentioned about one per week coming on that are related to just Pole Foreman, or is there a bit more of a spread to sort of IKE Office Pro, etc.?
Specific to the IKE Performance product, yeah, we've won now 110 customers, I think, through the last 12 months. 50 odd have been new, and 60 have been conversions from the legacy product. The really interesting part, and this is important, I think, with an investor lens, if you become the standard for network design within an electric utility, then the ecosystem effect is quite significant.
So you imagine if you're an engineering company that wins a contract at that electric utility serving a few million customers, or you're a communications company trying to attach your fiber, the requirement becomes to use IKE Performance software in the process. So there's a long tail of sort of flow-through impact in terms of use of the software. So that's the big game is to win these big electric utilities, and then you sort of flow through to the ecosystem.
Just with regard to those sort of customer wins that have continued, I was wondering if you could give us an idea of, as you go down to the smaller utilities, does that require sort of more sales and marketing staff on the ground? And sort of your view about how you get to the lower tier of utilities?
Yeah, to get to the several thousand others. But again, the attractive thing about this industry, it's hard to enter, but they're all natural monopolies, right? Power companies don't compete with each other. They actually share best practice. So the opportunity is for some of these thought leaders to share best practice. And that helps a lot. And it means you don't need a direct sales model necessarily to go down and get the next set. You do need great delivery and great expertise, but you don't need direct sales.
Great, and then just last one from me. With regard to sort of Google Street View data that was being used to some degree, any sort of update about how that will be integrated into products, and certainly if Google's using it or going to direct to customer for their data side of things themselves?
I mean, we've partnered with Google and their Street View team to use their imagery to grab power network information. It's kind of the other way around. We're in a position to be able to use all of their data and apply it to power network problems in electric utilities.
Google, they're not in the game of power network management, but they do like to use their data to help companies make some of these underlying infrastructure companies smarter. So it's been a great opportunity. We're doing some interesting things with that kind of bulk data information.
Great. That's all from me, and congratulations again. Cheers.
Great. Thank you. We've got a few more questions, Glenn. Can you speak to the opportunity for your business with the data center infrastructure build-out that is currently underway in the U.S.?
The way it flows through to us, and remember, we're a small part of a big ecosystem. The data center and actually the electric vehicle sort of market tailwinds, what it means is you need much more power infrastructure sitting on the grid. That means that you need more power capacity on overhead power poles and distribution infrastructure. And we help design and keep that infrastructure resilient, so we're a small part in that big cog.
But yeah, obviously, the fact that data center requirements are going through the roof. Electric vehicles need to be charged, yeah. By 2050, the U.S. has to at least double power capacity in overhead infrastructure, and again, we're the design standard for the design of those overhead assets and some of these bigger power utilities, so that's how we fit in. We can help it just go faster and be more resilient.
Thanks, Glenn. Would you expect cash and receivables to continue to build this quarter? What sort of spend on project or development would you expect as well?
Yeah, we're in a healthy spot balance sheet-wise, and yeah, I think cash and receivables will grow again through this next quarter. It will just depend on some contract timing, but we've got things in process at the moment in terms of close that will just be depending on timing. But we're in a good spot on that front.
Thanks, Glenn. And just last question. California remains under-penetrated. What's the opportunity there, and how has the wildfires impacted there?
Yeah, it's a terrible set of events in LA, obviously. And a couple of years back, it was a similar event in Northern California. We're a standard in San Diego Gas and Electric in terms of one of our products, IKE Office Pro. We're looking pretty hard at what we can do to help SoCal Edison, which is having the problems now, and Pacific Gas and Electric and some others. So yeah, they're terrible tailwinds, but they are things that we can hopefully help fix next time.
Thanks, Glenn. And can we just get some color on what gross margins look like across the three revenue buckets, please?
Yeah. In terms of what we report on the subscription side of the business, it's high at close to 90% now, and down on the transaction side of the business, it's at 35%. That's where we're clipping the ticket when customers either use our service or when they use the software themselves, and I think hardware and other sits at about 50%.
Everything's been improving. If you take a blended rate where it's, yeah, we're up 10%, I think, on the same time last year based on revenue mix, and we do intend on the transaction side, we're introducing some AI and some automation to keep improving that transaction number, so again, pretty healthy in terms of the gross margin profile.
Great. Thanks, Glenn. That concludes the Q&A segment. I might just hand it back to you for closing remark.
Oh, nothing else for me. I just want to thank everyone for joining the call for this update. And of course, myself, Brian, Simon, we're always available for follow-up questions. So thank you. Great. Thanks, Glenn. Thanks all for attending.