Ann: June quarter update including new record sales result-CAT.AX, page-4

It is great to see an Australian company at the forefront of their industry selling product globally.

My only question with this stock is valuation and what is the true market potential for their product.

At $4.00 this stock has a $600m market cap post the recent raise.
The Catapult business will lose $4m this year, while pro-forma XOS earnings ($8m) would see a profit closer to $4m.
XOS was founded in 1999 so I do wonder about their technology, but there are clear customer & technology synergies.
With FY'16 pro-forma revenue of $52m, the revenue multiple is ~11.0x - WOW.

My understanding of this business is that a sale is a combination of hardware and software - so one-off + recurring.
Based on cumulative unit sales to-date, and 25 unit sales per team CAT are selling to ~900 teams already.
XOS in their 16-years currently service "only" 400 teams.
How many clubs in the world are really capable of spending ~$75k over 3-years for this product.

One feels if this product was sold to builders, bakers or candlestick makers it would be far less sexy.

Maybe a consumer version of the product may open-up market potential, but this is a very competitive space.
Maybe a big sporting brand wants to enter the space and a A$600m spend is peanuts.

Great example how a Nano can become a whale - but a little ahead of itself for mine.