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clock Created with Sketch. 16/02/18
08:56
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Originally posted by Gusman1974
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Great explanation, and investors should get the differences clear in their heads. With BIG it is confusing at this early stage due to the amount of cash being received upfront for a subscription based product, thus leading to large amounts of deferred revenue. But I think it is misleading to solely concentrate on revenues and profitability in this case due to the fact that the majority of costs to provide the service fall in the first 3 months. If BIG did not encourage up front payments then they may have had a profitable business but their growth could have been significantly impacted by cash flow restrictions and there would have been a few more CR’s (due to the cash flow side of things, they have needed to pay for services with shares. Good idea but due to the massive rise in SP even management are probably starting to question if this was wise. now they have cash flow and cash in the bank, I doubt they will be giving any more of the business away for services rendered).
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Agreed, the model combined with the insane growth makes it hard enough to forecast revenue let alone profit. However a few poster have put forward decent estimates based on sound logic. @chakay posted something recently.
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