Its not crushing them on ARRx sadly.
| Share | ARRx | ARR | YoY ARR Growth | MCAP | Notes |
|---|
| 1 | ASX: DUB | 18.0 | $16,100,000 | 22% | $289,223,925 |
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| 2 | ASX: DTC | 18.8 | $20,020,000 | 38% | $376,930,238 | 91% recurring |
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| 3 | ASX:SKO | 19.2 | $24,100,000 | 16% | $463,758,600 | 93% recurring, cashburn target $2-4m per month out to FY22 |
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| 4 | ASX:BTH | 14.8 | $36,000,000 | 53% | $531,967,279 | 40% Organic |
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| 5 | ASX:WSP | 9.0 | $43,700,000 | 36% | $393,065,151 |
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| 6 | ASX:LVT | 4.1 | $57,100,000 | 33% | $234,578,206 |
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| 7 | ASX:ELO | 8.7 | $55,100,000 | 20% | $478,745,639 | 98% recurring |
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| 8 | ASX:NTO | 11.3 | $55,750,000 | 40% | $628,164,488 | 47% recurring, annualised quarterly growth |
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| 9 | ASX:OCL | 16.3 | $70,000,000 | 22% | $1,143,449,130 | 75% recurring. ARR grew 22% |
|---|
I feel that ARR $57.1 and cash after settlement $26.2 are better than i expected. Its pleasing to see the language around sales pipeline has accelerated as we need ARR growth sooner rather than later.
They are a tech company and to defend their market position they need to continually invest in tech - so id like to see a disciplined / incremental ramp up of expenses as ARR / CF grows. I dont mind if they aren't CF positive by the end of the year if they are communicating that they are growing expenses inline with ARR to maintain momentum etc.
The other issue is potential acquisitions which management has stated are still being considered.
For a re-rate we will need to see this type of ARR growth maintained over a year
In reality the annualised ARR growth should they deliver a similar growth in the December quarter will be 15% YoY (eg 52.7m in Dec 19 - ~$60m in Dec 20). However if we maintain similar growth and hit roughly $68m by 30 June 2021, thats 27% YoY growth and more inline with peers. Given we have had a flat period i think its fair to look at MoM growth for the next few quarters to wash out what has been a strange period.
Those figures along with disciplined OPEX should see a rerate, otherwise we are still sitting on 3x ARRx while other companies above are 10x +
NB - id say whisper (WSP) is in a similar position where they are seeing good CF/ARR growth but are deciding to ramp up OPEX to grow. They have bounced between 9-13x ARR lately (they are down from highs).
Alot of the companies in the table above have also completed capital raising and are still flying high.
