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25/08/21
12:30
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Originally posted by SteveSage:
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challenge is the cash burn........they had ~10m in cash outflows in FY2021 (including lease and payment for capitalised R&D) in FY 2022 if they plan to spend 17.5m in R&D, it's 7.5m more....that means that they will actually increase cash burn given their margins also it should be noted that their margins are very low (at 60%) for a SaaS business so they need to generate $1.65 in revenues to cover $1 in other costs Given they have also flagged an increase in FY2023 on R&D (again another 6-7m step up), they need to generate at least ~16m more in revenues each additional just to stand still (cashflow wise) ....and that is if you assume no increase in other expenses market seems to like the strategy, I hope mgmt know what they are doing
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well remember the insto's came in at $3.75, so the "market" will like anything with a positive feel that gets them closer to that price.