WAVUS (336060), a spatial information platform company, is accelerating its performance recovery in the second half of the year, supported by growth in its core System Integration (SI) and System Management (SM) businesses and a significant increase in its order backlog. While overall revenue declined in the first half due to lower-margin equipment sales, revenue from its core businesses and overall profitability improved.

According to an independent research report published by R on October 1, WAVUS's consolidated revenue in the first half of this year was KRW 26.47 billion, down year over year. However, service revenue recognized over the contract period from public-sector system integration (SI) and maintenance (SM) businesses reached KRW 25.24 billion, up 9.9% from KRW 22.97 billion in the same period last year.

In particular, SM service revenue, which provides a recurring revenue base, increased 20.4% year over year. While overall revenue declined due to a decrease in low-margin product sales that had temporarily occurred in the first half of last year, the proportion of relatively higher-margin service revenue increased.

According to R, WAVUS's gross profit margin rose by 5.7 percentage points in the first half, from 21.0% last year to 26.7% this year. The report noted that changes in the company's sales mix and profitability should be considered rather than focusing solely on overall revenue.

The company also strengthened its capabilities for future growth initiatives during the first half of the year. WAVUS added 20 professionals with 15 to 20 years of experience, including two Ph.D. holders and six master's degree holders, to develop and commercialize GeoAI, which combines spatial information and artificial intelligence (AI), including urban safety AI and AI-based integrated licensing demonstration projects. According to the report, the resulting increase in labor costs was one of the factors contributing to higher SG&A expenses in the first half.

WAVUS's order backlog increased 107% in six months, from KRW 16.94 billion at the end of last year to KRW 35.12 billion at the end of June this year. Of this amount, KRW 17.71 billion is expected to be recognized as revenue in the second half of the year.

Large-scale orders also continued, particularly in the public sector. WAVUS secured a KRW 14.38 billion contract for the integrated maintenance project of the National Health Insurance Service, a KRW 7.14 billion maintenance contract for the information infrastructure of Korea Land & Housing Corporation (LH), and a KRW 3.36 billion contract for the third phase of the next-generation real estate comprehensive study system project. In particular, the National Health Insurance Service's integrated maintenance contract increased by 15.4% compared with the previous contract, demonstrating the potential for recurring orders from WAVUS's existing customer base.

R forecasts that WAVUS's core business revenue this year will exceed last year's KRW 54.23 billion, taking into account its existing order backlog and recurring revenue. The report expects revenue recognition from existing contracts, along with the seasonality of public-sector SI projects that tend to be concentrated in the second half of the year, to contribute to improved performance.

In new growth areas, WAVUS is expanding its GeoAI and digital twin businesses, which combine spatial information with AI. Based on more than 20 years of experience in developing and operating spatial information systems, WAVUS has built and operated major public-sector systems, including the Korea Land Information System (KLIS), the Ilsa Pyeonri system, and the Real Estate Comprehensive Study System. The company also operates its own platforms, including GeOnPaaS, GeOnDT, GeOnCity, GeOnAirX, and GeOnAI.

The company plans to respond to growing demand for AI in the public sector and expand into high-value-added platform businesses by leveraging the data and digital twin technologies accumulated through its existing spatial information business. It aims to establish GeoAI as a new growth driver, beginning with urban safety AI.

WAVUS's financial position also provides a foundation for business expansion. According to R, as of the end of June this year, WAVUS's net financial assets stood at KRW 39.43 billion, exceeding its market capitalization of approximately KRW 29.57 billion. Its debt-to-equity ratio was 46.3%, while its equity ratio stood at 68.3%.

"In the first half of the year, we temporarily reduced equipment sales while expanding our professional workforce to prepare for future growth businesses," a WAVUS official said. "We will strengthen our competitiveness in our existing businesses while expanding new growth areas such as GeoAI and digital twins. With the growth of our core spatial information SI and SM businesses and the expansion of our order backlog, we have laid the foundation for improved performance in the second half of the year and will continue to secure sustainable growth drivers."

Specialjhw@asiae.co.kr

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