Ann: Exceptional sales growth across all channels in Sept Quarter, page-7

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Andyrooster

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11/10/19

00:27

Post #: 40825805
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Originally posted by cdchi1: ↑

The highlight (because it was completely unexpected) in the recent update for me was the 3.7k direct subscribers added in the quarter...the majority of which was through the company website. Doesn't sound like much but 3.7k subscribers equates to approx $200k per annum. Not sure if this will be replicated in future quarters, it was an unusual increase (even the company Im sure was surprised), but if it is its very significant as its virtually pure profit.

I'm personally though more interested in the student licenses short term, at least until the 'paying subscribers' gains critical mass. Their service (to schools) is best in breed, and in the same cost bracket (probably cheaper) than the alternatives, and with a very low 'setup' cost (so high margin). There is very little reason why school districts in the US wont continue to fall over themselves to signup to the FZO offering. And FZO themselves have said they are only targetting small to medium districts for now...what happens when they approach the larger ones with a 'proven in practice' product?

Here's a link to a list of largest school districts ranking in the US by student size, back in 2014. If you assume say $8 per student, just one of the smallest 'bigger' districts in that list would add $300+k revenue per year on student licenses alone. We have signed up 65 US school districts in a VERY short space of time. Guess how many school districts in the United States? As at 2015 it was estimated around 13,500 (source ). Talk about only scratching the surface!

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Great post @cdhi1, I must admit I didn't think much of the 3.7k new direct clients when I read the announcement but your explanation points out it was significant and as you say if that growth continues in that area it will be very significant. Also from the announcement they said they added 86k student licences for the quarter at A$8-10 per student. That equates to a figure between A$688 k and 866k. Do you know if the company gets the full $8-10 or a percentage of it. If they are getting all of it then annual revenue growth for the quarter from direct subscribers and student licences is close to A$1Mil. Cheers Andrew.

FZO Price at posting: 19.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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