On the face of this announcement, it is pretty lackluster. $700k loss for the quarter. However, once you look a little bit closer it starts looking pretty good.
They have $35m in contracted revenue, with $18.7m of that to be realised in FY16. It gets better...
"As in the past, Cogstate expects that total revenue in FY16 will exceed the amount contracted for that year as at 22nd October 2015. For example, 63% of the $15.2m clinical trials revenue for FY15 was contracted at 22nd October 2015 ($9.6m)".
So if we apply the same metrics to this year, it implies $31m of total revenue. I believe this is conservative, so it could potentially be more. The update also provided margin range between 57% and 60%, and overheads in line with last year. Applying this, we get gross profit of about $18m - $19m, and $5m - $6m of EBITDA.
This doesn't take into consideration Precision either, which was surprising. To quote
@Fire Bull previously:
"In September 2014, Cogstate provided guidance of its goal to reach $3 - $6m million of signed contracts for Pecision Recruitment during the 2015 financial year..."
"...As a result, Cogstate is on track to achieve guidance provided in September about the value of Precision Recruitment contracts signed during the 2015 financial year (although revenues will be recognised over the course of the contract..."
"...It is expected that the majority of revenue from the contracts in place will be recognised in the 2016 financial year."
Plenty of upside in this IMO
(20min delay)