In my opinion,
The positives:
- Cash receipt for 3rd quarter = $692k, which consists of $432k recurring revenue (cloud and data centre operation) and $226k hardware sale (one-off). Management said the hardware sale will also enhance recurring revenue for the business. Management said QoQ cash receipt growth was 67% => 2Q21 cash receipt = $414k. This is a good sign since 3Q recurring revenue $432k is higher than 2Q total cash receipt.
- FYTD cash receipts = $1.7m. Let’s assume they would add between $500k to $700k in cash receipt in the final quarter (being modest). This will bring full year number to be between $2.2m and $2.4m. Assuming this is more or less in line with the revenue, we’re looking at revenue growth of between 16% to 26%.
- Cash burn is reasonable. $293k per quarter. They’ve been buying PPE at a reasonable pace. They have $3.8m in cash at the end of the quarter.
- Hired 2 new sales and BDMs & a promo campaign => good.
- No $ amount was mentioned in regards to the eco friendly modular. Probably just to excite the ESG investors. But it’s good that there’s an additional source of revenue.
The negatives:
- Bibra Lake is “anticipated” to be fully operational and online in Q4. Previously, management advised the DC would go online by April. So my take is that there is some minor delay. No mention of a certain date/timeframe will not be appreciated by the market.
I don’t think it is a bad 4C by any mean. The numbers and metrics are pretty good and tracking well. Unfortunately, the lack of info on the sexy part of the business, Bibra Lake, is probably not well received by the market. The next 4C will hopefully include Bibra Lake's numbers. It'll be an interesting read.
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