Tantalus Systems

Overview

Extreme weather conditions and consumer behaviour pattern changes, such as the shift towards electric vehicles, are increasing the number of challenges confronting utilities. These factors, coupled with existing aging infrastructure, leave legacy one-way grids unprepared and ill-equipped to manage the demands of the modern world.

Smart grids provide reliable and sustainable services to utilities by providing a digital network made up of multi-directional communications, control systems and edge-computing processing that can reduce the frequency and duration of power outages, reduce storm impacts, and restore service faster when outages occur. The global smart grid technology market is expected to triple in size from 2017 to 2023 to reach US$61 billion. As global investments in renewable energy capacity increased from $32 billion in 2004 to $282.2 billion in 2019, smart grid companies will likely present an exciting opportunity for investors.

Tantalus Systems (TSX:GRID) is a smart grid solutions provider focused on transforming aging one-way grids into future-proofed multi-directional smart grids. The company’s goal is to improve the efficiency, reliability and sustainability of public power and electric cooperative utilities and the communities they serve in North America and the Caribbean Basin. Tantalus is led by a highly experienced management team with decades of experience in the energy and capital markets.

In 2013, Tantalus was the first company in their market to deliver a Linux-based edge computing platform in the utility industry. The company’s market-leading edge computing platform and its unique technical abilities set Tantalus far ahead of the competition –– many of which are only now starting to implement edge computing.

Tantalus offers a purpose-driven and cyber secure market-leading edge computing platform, robust software applications and an advanced IoT communications network. The company also aggregates and leverages 30 billion data points from its user community and utilities to provide in-depth data analytics to customers. These analytics allow utilities to efficiently and effectively manage service quality and infrastructure to save money, reduce greenhouse gas emissions, improve efficiency and avoid unwanted major events such as fires.

The company also boasts a highly impressive 99 percent customer retention rate over 30 years. As a result, Tantalus has established deep relationships with customers that typically last for 15 or more. The company also had a compounded annual customer base growth rate of 20 percent from 2013 to 2020. In the first two quarters of 2021 alone, the company added 11 new utilities to its user community for a customer base of over 200 utilities.

In August 2021, Tantalus announced strong financial results for the second quarter of 2021. The company reported a 7 percent revenue growth year-over-year for the first six months of the year from US$15 million to US$16 million. The company also reported its 18th consecutive quarter, or more than four years of delivering positive adjusted EBITDA.

Tantalus completed a C$9.9 million financing in conjunction with going public in February, 2021 and recently completed a C$10.6 million overnight-marketed financing which substantially strengthened its balance sheet. As a result of this financing, the company has a strong cash position on August 12, 2021 of approximately US$16 million.

The company also prides itself on its positive organizational culture that fosters a rewarding environment for employees to engage and contribute in the company’s key initiatives. The company’s culture breeds autonomy and accountability for all employees, including the top executives. Tantalus has 120 to 125 employees who are passionate and proud of the achievements and goals that the company has.

Going forward, Tantalus plans to continue scaling their user community of utilities, monetizing the data that is captured by their solution and expanding the applications that they deliver through investment in R&D. The company also plans to expand to new geographic regions and seek strategic partnerships and M&A opportunities.

Company Highlights

• Tantalus Systems is a smart grid solutions provider focused on transforming aging one-way grids into future-proofed multi-directional smart grids for public power and electric cooperative utilities in North America and the Caribbean Basin.
• Tantalus offers a purpose-driven and cyber secure market-leading edge computing platform, robust software applications, an advanced IoT communications network and deep data analytics.
• In 2013, Tantalus was the first company in their market to deliver a Linux-based edge computing platform in the utility industry.
• The company also boasts a highly impressive 99 percent customer retention rate over 30 years and a compounded annual customer base growth rate of 20 percent from 2013 to 2020.
• The company has a strong cash position, strong year-over-year revenue growth and more than four consecutive years of positive EBITDA.
• Tantalus is led by a highly experienced management team with decades of experience in the energy and capital markets.