Hi @Hogana123 et al.,
Observations (with rose coloured glasses off):
1) Disappointed on several levels....
a) I should have read the low receipt figure better after the last quarter receivables sweep to only $77k! I should have assessed at least a $2m rebuild of receivables for this Q. Apols guys and girls. Sloppy work from an ex-analyst.
b) Even so, there's about another $1.2-1.5m that should have been collected on a BAU basis and all we can glean from the Q is "deferred milestone payments". At best this suggests:
i) Limited (few), steady state, subscription-type contracts. More lump-type PoC, trial and project based contracts, and/or
ii) possible difficulty in meeting 'milestone' events of the lump-type contracts, and/or
iii) Happy clients almost always pay early/on time. The depth and contentment of regular clients does not appear to be healthy, and/or
iv) Is there a high churn rate we aren't informed of?
c) Management has unfortunately reverted to their 'OVER PROMISE, UNDER-DELIVER, BS HYPE' shareholder comms. Flagging the usual client growth and up-sells in most verticals?!? Its super insulting for them to try this on shareholders for a 4th time. Just when they were starting to re-build some much needed credibility, they go ahead and.....
2) Expenses: Spend was down about $0.8m on the Q.
a) Of these, the more notable (for me) was the AWAS expense of only $400k...lowest in about 3 years. This infers to me how much data they are working with and I like to see this grow generally.
b) Wages/Head count. I lump R&D, Staff costs and Admin to get a possible indication of internal head count movement. Its fallen 26% from Q1 to Q2 and a further 11% Q2 to Q3. Hard to grow a business when employee wages/head count appears to be shrinking.
3) Verticals:
a) Mining upside looks good (if they can deliver on their global hype)
b) Defence. Reduced hype = reduced hope?
4) R&D. Despite reduced spend here, I was encouraged by a) expanding their software to handle non-Reigle hardware and b) Imaged based AI analysis. Huge potential upside for both developments.
5) Corporate Valuation: This is going to be sin-binned (held down) until they can demonstrate a (happier?) client base with greater breadth and depth to smooth out the lumpiness. When will this occur?....maybe when Receipt/revenues attain $20-25+m ARR and when Qtr volatility can come under 30%...so maybe later this year? Its just that when receipts are this lumpy, its very hard for the Board to plan and spend for growth initiatives.
6) What would help?: KEEPING SHAREHOLDERS INFORMED (not surprised!) WITHOUT BS HYPE. Its called RESPECT Via HONESTY and OPENNESS.
Despite the rant, I still have a sense this can work...with respect and some time. If giving OI another chance is possible without fainting then.....go ahead!
Cheers,
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