NTO (ASX) Ann: Nitro Q1 2022 Quarterly Activities Report and Appendix 4C

Originally posted by nailsnglue: ↑

Completely agree! The MC of competitors could explain the puzzling big market cap ($15bUSD and Adobe e-sign, a portion of $191B). Feature offerings and user pricing is similar to NTO. GigaOm Radar report for eSignatures names Docusign, Adobe sign and Nitro as the three leaders. To be frank, I never thought it would cost so much for users to sign and request e signatures. DocuSign is $14/month for a single user to make up to 5 e-signature requests a month ($34 for unlimited) and includes some features and pdf tools. Adobe is $21.99/month but with no pdf tools and Nitro is $14.99 -$28.99/month/user but pdf tools need to be purchased as a one time at $260. Adobe does seem to have the best value plan if you don't need tools.

Could you argue that these e-signing businesses are technologically mature? If so, operating costs should remain stable. SO user growth is the key to FCF by 2h 2023. While it seems hard to believe that to just obtain a e-signature, you need to pay such a high per monthly user cost. A signature obtained quickly generally increases productivity for businesses rather than having to wait 2 weeks for someone to return a hand signed form in the post. Then there is the question of having to store those signatures since scanned-in signatures are not legally binding. Scanned signatures are a copy of the original whereas a QES (qualified electronic signature) is actually the original signature. A QES can:
identify the signatory;
establish proof of the signatory’s consent;
guarantee suitable conditions to preserve the integrity of the document and the signature.

Could you argue that demand would increase for e- signatures? One would think so since it should increase productivity and this might be an edge ALL businesses decide to do to become more efficient in a slower world. Thispaper makes 10 good arguments for the widespread adoption of QES e-signtures.

NTO is closely following the DocuSign(red) SP comparison chart. Both companies are yet to be FCF positive. Adobe (green) is profitable but has side businesses with Adobe e-sign only a small portion of the business. Adobe is still priced at 39 times despite recent falls. If NTO and DocuSign become profitable, what will the pricing be? Probably much higher.

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Thanks for sharing your analysis nails. I bought Nitro on a bit of a whim and haven't done a lot of research. It was good to read the cost comparison that you provided. It does seem inevitable that e-signing will become ubiquitous, but will it be a case of one player becoming the default choice and taking the entire market share? If so, it probably won't be the smallest of the 3.