Ike on its bike! Its another story of a new product (launched...

Ike on its bike! Its another story of a new product (launched end of last year) driving increased growth missed by the market.

So FY25 (March) recurring subscription revenue guided up 50% at $16m. They said on the call that the $16m was based on signed contracts, so must be some upside, and also infers that ARR is $16m now.

With >30% CAGR in sub revenue over the 3 years leading up to this forecast growth spike, gross margins in subscription revenue 86% (See table below) and hardly any churn (they say >95% customer retention), the subscription business must be worth at least 7.5x ARR. So $120m.

Instead the whole group, including the transactional business, trades with EV of $62m. Usual crazy Australasian stuff. Given its a US business, where valuations are are much higher, it is likely to get sorted by a takeover, acquirer will describe as "Highly Accretive" similar to Task.

Balance sheet position also relevant to the above and sturdy here with what they call "cash and receivables" of $15m (I've just deducted the $10m cash for EV above). Cash flow was about negative $1m over the last 6 months. I think with $4m cost cuts effective in Jan and growth, they are probably around cash flow neutral or better.