They mentioned recently investment in the platform is being...

They mentioned recently investment in the platform is being developed to handle data from 500m users. Currently they have around 160m. In addition they've mentioned their apps being used more, with usage growth estimated to be CAGR 25% in the next 3-5 years, so actual usage growth could go up 6x in total.

Clearly Mcd's is driving this and I believe they're getting around 10 new countries each year with currently 56 out of around 120 countries worldwide. Notably this doesn't include the US yet. I think they are trying to perfect their methods before bringing the plexure app and data analytics software to the US market.

An article in the Herald recently touched on Plexure driving relationships with 7/11 and Ikea, who are currently on their books. I think the 7/11 could be massive if they adopt it more globally.

Strong revenue growth in the first half, but still no shift in revenue guidance. At this stage around $23m looks most likely. We need more customers announced to help diversify our revenue base. We're lucky we have Mcd's as a foundation, but if we can add in more enterprise customers like White Castle then investors will get on board even more.

Having looked at some of their competitors mentioned at their AGM, like Swrve or more broadly Salesforce, it is more competitive than I thought. But looking at the industry, there is big growth in mobile marketing for ordering food and being used for loyalty schemes ect. If I ever got to Mcd's I ask how many orders are using the App and I'm always told "a lot and it has grown" so I expect this trend to continue.

They have invested a lot in the platform and on developers and marketing. Both these roles can be done remotely in NZ which I like because it's generally more cost effective and they may be able to offer more attractive pricing than competitors. But they need to grow their sales team in the US and they are doing that now while also looking for a big time US-based director. Once this falls into place we should hopefully see more wins coming through.

I do try and remember that these deals involve a longer sales cycle and a full commitment from the customer but once they win one like White Castle, it does translate into good earnings both in licensing fees and consultancy (60-40 split). Ideally the licensing fee revenue will grow as a % over-time as it's quite low relative to the users (160m). Plexure are using the new platform and developing further functionality to try and monetise it further and increase licensing fees. We've seen this with the new, improved deal with Mcd's and this will be rolled out to new customers.

The CEO and Chairman have maintained further customer wins will be had in FY20. If we can land more US-based customers and expand our deal with 7/11 or Ikea then I expect us to be going back to $1. We have strong support at current levels, but the market wants to see the massive increase in headcount's impact on NPAT and operating cash-flow. They haven't forecasted this so potentially a dimmer view is being taken by the market.

I can't see Plexure increasing their headcount from 70 to 100 and now they're looking at 150, unless massive growth is expected. They have 15m in the bank and have no intentions of raising further capital, which means organic growth is good and industry fundamentals will support them. They're already cash flow positive and made $2m in the first half, unlike a lot of other tech companies listed on the ASX.

This has definitely gone under the radar not being listed on the ASX. They were about to but Mcd's invested in them and they got $5m without the cost of IPO. I'm confident that Plexure is fairly priced at current levels with a price-to-sales of 5 and P/e of around 50.

I've seen two analyst reports on Plexure and bizarrely they both only project revenue to grow 10% beyond FY20. Initially one only had meagre growth for FY20. I believe mgmt are responsible enough to scale the business correctly and the increase in staff levels implies revenue and profit growth with the addition of new customers and expanding deals with current ones. Wouldn't be surprised to see this take off on the next bit of good news announced.