Annual FY operating costs are around $2.5 ~ $3M. (Lets use the lower $2.5M in this analysis)
Smart tags sold via channel partners generate $120 pa.
While smart tags sold directly are priced at $180.
The companies direction is to leverage their channel partners at I think 65/35 ratio so lets average a smart tag at $145 pa.
So to reach break even we need to sell over 17 thousand smart tags.
Our current CCV is $730k so we have around 5,000 active smart tags in active subscription.
So we need 350% growth on our current subscription amount to break even.
Below is the CCV growth from Q1 2017 to now.
Column 1
Column 2
Column 3
Column 4
Column 5
Column 6
Column 7
Column 8
Column 9
Column 10
Column 11
Column 12
Column 13
Column 14
0
Customer Contract Value (CCV)
Q1 17
Q2 17
Q3 17
Q4 17
Q1 18
Q2 18
Q3 18
Q4 18
Q1 19
Q2 19
Q3 19
Q4 19
Q1 2020
1
24 Month CCV
$ 275,000
$ 340,000
$ 440,000
$ 530,000
$ 630,000
$ 750,000
$ 900,000
$ 1,080,000
$ 1,296,000
$ 1,555,200
$1,866,240
$2,239,488
$2,687,386
2
Increase
24%
29%
20%
19%
19%
20%
20%
20%
20%
20%
20%
20%
We are growing CCV at about 20% average each quarter.
Assuming all stays as is we are pretty far away from returning a net profit.
But realistically we know the company will sign more channel partners and expand into new geographies/countries and the technology is 'morphing' to target new markets as we have seen with these new Ph sensors and so forth.
So in my 'optimistic' model I see us break even 1H 2019.
Column 1
Column 2
Column 3
Column 4
Column 5
Column 6
Column 7
Column 8
Column 9
Column 10
0
Customer Contract Value (CCV)
Q1 17
Q2 17
Q3 17
Q4 17
Q1 18
Q2 18
Q3 18
Q4 18
Q1 19
1
24 Month CCV
$ 275,000
$ 340,000
$ 440,000
$ 530,000
$ 630,000
$ 819,000
$1,064,700
$ 1,597,050
$2,395,575
2
Increase
24%
29%
20%
19%
30%
30%
50%
50%
Pure speculation and of course have assumed Opex stays flat.
Just food for thought and I also think CCP are selling the devices too cheap, unless we make a significant footprint globally.
CT1 Price at posting:
1.4¢ Sentiment: Buy Disclosure: Held
