They use 95% gross margin and 92.5% retention rate in their presentation.
Gross margin potentially high given most recent figure for P&M was $2m and revenue was $8m implying margin of 6/8=75%, of course there is variation but I'm curious to see if 95% is their long run estimate or if P&M maybe includes other costs that aren't variable.
92.5%
retention rate seems about right but obviously is less than the net retention rate which includes growing ARR/customer. I guess they were being conservative and assuming that will not continue to perpetuity.
Rolling Net retention rate and churn figures in their 4c's I think would be appreciated. As well as COA calculations because they use Marketing plus some undisclosed fraction of staff/corporate as growth costs. Just to make it less cryptic for lazy investors.
Also curious to see updates on yearly/quarterly contract composition so our models are more accurate - not super important.
Maybe also more direct idea of how costs will grow with revenue. Will percentage compositions stay relatively constant or will R&D and staff/corporate costs go down as marketing increases most relatively. Again, probably a hard question to ask and not super relevant.
Why they don't wait for a raise when price is higher also, Sept figures should impress and I don't see cash going below zero (green line) for quite a while with grants and decreasing cash flow. I'll show my model below again so Kingfool as you so aptly named can see what I mean.
For gross margin is it most realistic to use (product/manufacturing costs)/revenue or over increase in arr? (I use revenue but just checking). I guess because the cost is mostly one off though it should be incurred during installation so maybe ARR is best metric for this. Correct me if I'm wrong.
(20min delay)