Ann: Strong quarter tops out $10m sales in the first half, up 96%, page-5

Hi @jaluma

Short answer is, not waiting for much. But I've only recently become aware of this company and I like to sit and watch for a while, even if it means eventually buying at a higher price (that can work both ways, of course - in the current macro environment I think patient investors might get plenty of entry opportunities on the companies they like). Evidence of that was today's price action; up 12% then finished down 1.4%!).

I need to do more DD, but I've just been running through the headline numbers from the last 10 quarterlies and it looks like it's on a positive trend:


Note that for the bottom box, green (negative) numbers means expenses have been reduced vs prior quarter, whereas red figures mean they've pushed out. It's a very simple excel sheet I used just to track the trends. Obviously pretty good to see that the operating cashflow has trended the right way, quite quickly. I understand from other write-ups that the business cut a lot of staff coming out of Covid to halt the cash burn and re-position towards digital marketing. Seems to have worked, both staff costs and advertising spend have come down, but seem to be on the up again. So long as cash receipts outpace this it should be OK for now.

Overall it looks very interesting, cash receipts seem a bit lumpy but it is a microcap and I understand the underlying seasonality of some sales. They've done $10.5M in revenue in the 1H (up 95% on same period last year), so if we assume FY revenue will be $21M, then at current valuation they're trading on just 6.27x revenue and are not burning cash - nice.

I don't know how easily replicable the software is so probably need to try and understand what moat there is, if any. Should they be spending more on R&D? That seems odd to me. Was the call recorded? I didn't manage to make it today.

Happy to hear any feedback/comments from holders here.

Cheers,
mondy