This isn’t correct, sorry. The health of the churn rate is dependent on the quality of the customer base. If you have a long sales cycle (such as large enterprise sales) an annual churn rate of 17% would be awful, because the cost of customer acquisition is so high that it is never recouped. However, if the sales cycle is very short this is not bad. Most companies that quote their churn figures in monthly churn figures, which sound a lot better than 17% but actually aren’t.
But it’s not rocket science, if revenue is going up when you zoom out and costs are going down, despite investment in good costs like R&D, sales (rather than from asset stripping/short sighted activities), you generally have a scaleable market.
My thesis is similar to yours. I also think the asset turnover of the business is very high, which suggests to me a leading indicator of a very high ROE business and the speed to revenue milestones is quicker than a lot of micro businesses on the ASX. Whether they can open up sufficient new use cases with the new technology + geographic expansion at the same cost profile remains to be seen.
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This isn’t correct, sorry. The health of the churn rate is...
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