A small company based in Perth, designs, builds, owns and operates some of the most powerful computers on the planet. DUG Technology (ASX:DUG) has facilities in Perth, London, Houston and Kuala Lumpur. Across these they have 30 petaflops of data processing power and over 43 petabytes of data storage capacity.
DUG’s supercomputers are used for high performance computing which involves using supercomputers and parallel processing techniques to solve very complex computational problems. For example, they worked with a satellite provider that provides agricultural analytics to enhance crop management. The data-processing tasks previously took weeks but using DUG’s services can be completed in hours.
DUG have also developed a patented cooling system that enables them to operate more energy efficiently. Therefore their supercomputers are not only some of the biggest, but also the greenest. This is demonstrated by the chart below.
Source: DUG Technology Ltd, Prospectus, 10 July 2020
DUG have traditionally generated most of their revenue by servicing the oil and gas industry. This continues although they are also diversifying their revenue sources. They provide oil and gas companies with geoscience and seismic data processing. Seismic surveys enable geoscientists to visualise and interpret the subsurface of the earth. It requires the processing of large and complex datasets.
DUG’s revenue is broken down over three segments, services, software and high performance computing. Services accounts for about 80% of total revenue and is largely derived from geoscience and seismic data processing. US$25.2 million of the US$40.3 million revenue in this segment in FY23 was derived from the Houston office, servicing Middle East clients as well as US clients.
Revenue grew strongly in FY23 to US$50.9 million from US$33.8 million. This was driven by 70% growth in the services segment with modest growth in the other two segments. However it should be noted that in 2019, prior to listing, they generated US$52 million in revenue.
However importantly, FY23 also saw a record profit, and the first time they have made a profit since listing.
This strong performance is reflected in the StockRank score of 84.
DUG’s Quality Rank has risen to 85. This is due to the high Health Trend and low Bankruptcy Risk as well as strong returns and margins. The net gearing…
