So I’ve looked at the financials and the deck to get past the CEO’s usual hype train (which when he talks reminds me of the lego movie song everything is awesome) and there are some real positives but some stuff which is of concern.
The upside:
They said that the US would grow and a focus market and in the last 12 months kudos to that as it has happened, clearly the powerhouse of the regions. Great rev increase and site expansion across all 3 I assume sectors be good to see this for a full year to June 30
Omnis product seems to be the quiet achiever, which was the original bread and butter of the business and with site expansion hopefully the expand strategy works and the site expansion really grows. IMO it doesn’t get the love it deserves
Aviation is back on the rise post COVID, albeit slowly, it is good to see that they are riding the aviation boom globally and can actually get revenue in the door which not even some of the big guys (looking at you Airbus) can do.
The problems
APAC & EMEA real laggards, especially APAC. No real site expansion and revenue growth weak. I think this looks obvious compared to the US success. I wonder if it explains the total revenue only growing 2.8% (slide 19)
ARR (slide 21)-it feels like they are being extremely creative-ARR was booked as $56.9m but actual rev as reported for ASX listing purposes is $48.3mn, with $1.2mn outstanding renewals (not so worried about that-contracts take time) but the bigger issue is $6.7mn of outstanding new sites-that is a major concern that they keep announcing $2mn+ qtrs and all the hype, but not turning the rev on. I’d like to know how quick they turn on things and the breakdown-is that $6.7mn. Water at $190k (p.8 of financials) but booked at $1.1mn ARR is a good little example
Pathway to profitability (slide 26)-again a lot of hype but back in FY21 Q4 was EBITDA + so in effect since July 2021 they’ve actually gone backwards and are still behind Q4 FY21. So after 18 months they have actually gone backwards quite significantly
OPEX is just way too high for such a small company, saving even 10, hopefully 20% off would really help profitability. In particular-employee costs (up $2mn), Computer expenses ($1.7mn) and other (800k). Just keeping like for like from Dec. 21 is $4.0m+ saving direct to bottom line. I really think they are missing the market signals about cost-globally companies are cutting spend, but these guys seems to be increasing.
