An interesting SAAS company ?

I find quite difficult to do stock picking among SAAS companies in the ASX.
Most of them are either hardly profitable, or already quite expensive.
So, the best time to buy them may be when they are at an inflection point.

It seems that we can make a case that Catapult is now at an inflection point :
- as it has returned to a positive EBITDA and positive free cash flow (before share based payment) during H1 24, thanks to a 20 % increase of their revenues, a significant increase of their gross margin* and a 9 % to10 % decrease of their costs,
- and it is on a trend to increase its SAAS revenues by 20 % per year (+ 18 % for H1 23 and + 23 % for H1 24).
Half of the growth coming from the increase in the customer base and the other half from the increase of revenue per pro team (due to upselling and cross-selling).
The growth is also coming both from their main division (wearables), as well at their other business (video).

Regarding the expected trend of growth, it would be interesting to have a figure regarding the growth of the industry, but I have not been able to find one so far.
I also tend to agree with them that the the elite sport (their customer base) is probably recession proof.

The company has a long term target to reach an OP margin of around 30 %, which looks high versus their past (best OP margin was 5.3 % in FY 20).
However, we know that there is a good level of operating leverage in the SAAS model**.
Based on other SAAS companies, a margin of 30 % at scale (with 80 % gross margin) seems possible to reach.

However, we could probably do this analysis some time ago. And the company had a bumpy past.
So, I would be careful about it.
At this stage, my main question is about their ability to sustain a high top line growth.
I don't know enough the industry to have a strong view about this.

* gross margin increased from 71 % in H1 23 to 80 % in H1 24, due to 2 elements :
- an improvement in their product mix,
- but also a change in their accounting method (more COGS was capitalized) which had an impact of around 1.6 m USD on the gross profit (explains around 3.2 ppt improvement in the gross margin).
** "our fixed costs are now at a level to support the business at scale and you should expect to see the costs rise modestly in terms of absolute dollars".