November 2024 Investor Forum

High-growth maritime artificial intelligence play

Windward is a fast-growing predictive analytics company that is focused on digitalising the global maritime industry. Windward’s AI-powered decision platform offers a wide-ranging view of the maritime ecosystem and enables stakeholders to make real-time, predictive intelligence-driven decisions to achieve business and operational readiness. The group operates a subscription-based or software-as-as-service revenue model, which provides very high (ca.99%) levels of recurring revenue and is cash-generative, with payments made in advance. The business grew revenue at 37% in the first half, and we believe could soon surpass the Rule of 40 (growth plus margin) test if management succeeds in driving growth.

• Strategy: The group targets a huge addressable market with a land-and-expand approach and using partners to help target as much of the market as is practicable. The product roadmap focuses on generative AI solutions; we note the recent launches of MAI Expert, Early Detection and Advanced Intelligence.
• Recent trading: In October, the company said it had made a strong start to 2H. It said that wins in the commercial sector continued at a steady pace, consistent with previous periods, and that acceptance rates for the recently launched MAI Expert, its proprietary generative AI agent, had been strong.
• Valuation: While Windward is growing strongly, it sits below the Rule of 40 (growth plus margin) target that is often used as a yardstick to rate high-growth companies. However, we believe the consensus forecasts are conservative, and management has plans to accelerate the growth rate.
• Risks: Accelerated investment by larger competitors is a threat. However, Windward has established a strong position over its 14 years of operation and is protecting its IP with a growing portfolio of patents. While its main operations are in Israel (regional conflict risk), the company has moved its HQ to London.
• Investment summary: Windward offers a rare investment proposition in the UK market in a genuine AI-play, with a compelling product offering and supported by a 14-year track record. The company estimates that it has more than 250,000 target customers, with an addressable market of over $10bn. The company has built up a high-quality customer base of 200+, which includes the US government, BP, Shell, HSBC and Maersk.