Ann: Appendix 4C - quarterly, page-62

Nice post @jlo2012, with a lot of interesting points you raise and are considering.

On the gross margin / COGS question, I don't have a good answer for you on this one unfortunately as I haven't seen it broken down anywhere and I doubt anyone else would have a detailed understanding unless you ask Ian Olsen. I did note in the last HY report that there was a 'Cost of Services' line item, only $4k, but maybe this was a change from treating these expenses as R&D previously during trials and proof of concepts, to now acknowledging the costs again genuine revenue? Anyway, that is all I can think of. There have been the occasional mentions around data costs, purchasing through the AWS spot market, allowing for higher data ingestion rates to scale and development work to decrease hosting costs (this QTRLY), but nothing more that I can think of.

The other key point I would call out is that people should be careful basing any gross margin models purely on data costs, as the company announcements regularly refer to both data and seats when referencing revenue. So company X might not increase their data hosting at all over 12 months, but if they want to add 20 more users, 3DP are going to increase their monthly subscription. If you actually look at the pricing, the size of a data set doesn't appear to impact pricing (https://app.pointerra.io/pricing/) greatly, its the number of users and the number of datasets that do. There might be a limit in the fine print somewhere, not sure.

I think Pointerra will be an extremely high margin business, given software development and hosting are the major costs and hosting is only ever going to get cheaper on a unit basis through AWS, but it might take another 12 months to really get a handle on that.

I think we will see real progress in 2019, both in revenue and market cap, but the genuine inflection point might still be more than 12 months away.