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BIG burrendong minerals limited - withdrawn

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BIG US revenue discussion, page-21

Currently unlisted. Proposed listing date: WITHDRAWN

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Gusman1974

2,646 Posts.

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12/01/18

12:08

Post #: 30254546
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Originally posted by Maysgr ↑

I had some spare time yesterday, so I had a look at a heap of info (via announcements) going back to the RTO.

My initial reaction to reading the revenue figure from the US had me wondering whether this was a good result or not. I remember the announcement that BIG made (5/9/17) where BIG stated they had signed agreements with an Annual Contract Value (ACV) of over $6m USD. In this quarterly update BIG advised US cash receipts of $2.2m AUD.

BIG was a back door listing at the end of 2014.

Assuming management can continue to successfully scale its operations (no reason to believe otherwise at present) it's really hard to get a grasp on how BIG this company can be.

It can be debated heavily about when BIG had a comparable presence in the US (compared to when starting in Australia).
In Q4 CY2015 the company sign a distribution licence agreement with DNA behaviour resources international. This was via a revenue share agreement, and only in 2 locations in the US. Work was also undertaken to research the market and build initial content for a foray in to the US market.

On 31/8/16 the company announced they had filmed over 1000 videos in the US and these were ready to be monetised.

In a 4/11/16 announcement BIG advised it had achieved first US revenue of $103,000 at an ARPU of $996. Active marketing had started in September 2016. It had conducted test and measure exercises in Texas, New York and California.
The announcement also stated
- US ARPU will closely reflect that in Aust
- Moving to the next stage of rollout via selling subscriptions through its US based operations
- seeking US JV's
- profitable in the US in the 16/17 FY (not sure that happened).

On 29/11/16 the company gave US revenue forecasts for FY17
Q1 - $0
Q2 - $200k
Q3 - $255k (roughly, based on bar chart interpretation)
Q4 - $340k (")

I am of the opinion these were not met, but I am of the opinion the office was opened later than they perhaps thought. There are no definite dates around some of these forecasts within announcements.

In a 31/8/17 the company stated that the Austin, Texas office opened in H1 CY17.

5/9/17 announcement, my take
- Austin site opened no earlier than March
- ACV of over $6m USD, 15 seat sales office
- US revenue now being generated will be captured in FY18 reporting
- further US sales operations planned for California and the East Coast.

10/10/17 announcement
-US revenue for the quarter $640k from Texas and California

9/11/17 announcement
-expanded telesales teams in the US and Australia

27/11/17 announcement
- US offices in Texas and California
- 29 combined seats (15 TX and 14 Ca)
- expanding to 100 combined seats by end of March QTR 2018
- expecting 1400 signed agreements by 31/12/17 and 6800 by end of FY18
- US ARPU of USD$4500 (A$5900)
- high value packages offered from Q4 CY17
- no upfront payments and no discounts
- further US east coast expansion in 2018.

7/11/17 announcement
- US sales on boards now matching Australia
- October and November record months for BIG

11/1/18 announcement
- US quarterly revenue of $2.2m
- results exceeding expectations

Now to put these in to perspective

In a slide from 2014 BIG stated there are 663k SME's in Australia and 5.215m in the US.

That's makes the US market about 8 times the size of Australia.

So, on the assumption BIG started its own US operations, with its own staff in the March quarter, this is how those operations compare to when they originally started in Australia.
The sales force was similar at around 15 heads originally.

Also note the revenue models are different, Australia was a pay up front for a 12-24 month contract. US is via a monthly payment.

In 3 quarters from the US BIG made $2.2m revenue at an ARPU of A$5900 (based on latest info available, 27/11/17 announcement)

What they have achieved in 3 quarters in the US took
- $2.2m in cash receipts (that took 7 quarters in Australia)
- ARPU of A$5900 (that took 10 quarters in Australia)

And none of this takes in to consideration any of the recent deals they have announced (Zeta and Tipsly for starters).

I would love for the company to start providing more specific US data, including the number of paying subscribers etc.

BIG also have their Queensland office coming online soon, with expectations of 100 sales staff.

So, assuming BIG can execute (no reason to believe they won't at this stage) it's not hard to get excited and it's difficult to truly understand how BIG this can be.

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Great post! Makes you think there could be a step change in activity both in AUS and the US, could we see a 100% cash growth in one of these upcoming quarters.

BIG Price at posting: $3.35 Sentiment: Buy Disclosure: Held
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0 Great analysis

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