1. Software revenue from the enterprise sector (telco) has been lumpy so comes in 1 million+ amounts. Some customers chose to take a deal where they pay up-front for a term license rather than monthly. Two projects contracted that way, delivered a lot of $ in FY23 and they are now complete and live. Only one of those one-off up-front $ projects landed in FY24. But 4 new ones started that will deliver long term recurring revenue and there are 8 more in the qualified sales pipe. I prefer to have the recurring revenue than the one-time deals from here. Its more predictable and profitable long-term.
2. At IPO ATV had zero software revenue (it was new) and so added MSP's to build a business that could IPO. Software revenue ramped to the moon from $300k year one to $1.2M year 2 and $6M year 3 then stablisised at $5.2M year 4 and so now we're fine tuning the MSP business by eliminating non-profitable contracts (ie reducing some revenue and costs) and aligning it with our B2B product, Global Edge NEO that we launched last week.
3. Our GPU orchestration product generates a baseline $1M revenue that will ratchet up as more GPU's are deployed. The customer that exclusively sells that for us in the telco sector now has 73 telcos contracted and we deployed 10 new ones in the year but until the total GPU's deployed exceeds the floor, the revenue will stay flat at $1M. Cloud gaming is a consumer product so more consumer TAM is better. We just (last week) deployed three PoPs for the seocnd largest telco on the planet by user count so it has potential to grow big, fast.
4. The last year was less than fun for micro cap tech. A lot of them took a PE deal and left the playing field. ATV focussed on reducing costs and managing working capital. The result was intentional. Revenue was down and EBITDA is up. The underlying business is accelerating with new product delivered, existing projects complete and new customer projects started. If the equity market allows we can bulk up and go harder but until then we will stay on a lean-chicken diet and do pushups at home rather than stock up on whey powder and hit the gym.
ATV Price at posting:
6.5¢ Sentiment: Buy Disclosure: Held
