The churn of N3 also has an impact on ARR numbers. You'd need to...

First 86 Last

Share
Profile

Follow
badkerning

168 Posts.

193

29/07/20

21:07

Post #: 46166212
Share

Originally posted by JPjpJPjpJP: ↑

I agree that increasing customer numbers, retention, receipts and reducing expenses is great.

Re ARR
1Mar 2019 used FX spot rates from Mar 31
-June 2019 used FX spot rates from June 30
-Sep 2019 used FX spot rates from Sep 30
-Dec 2019 used FX spot rates from Dec 31
-Mar 2020 used FX spot rates from Mar 31. AUD/USD and AUD/EUR fell heavily from end Dec to end Mar. This helped ARR as USD and EUR become higher due to favourable FX conversion rates.
-June 2020 used FX spot rates from Mar 31. EVERY other reporting period used the corresponding FX rate. The AUD strengthened back to Dec levels, and the FX related ARR gains were reversed. LVT gained $3m in new client ARR but lost $4.4m in FX. The same amount it gained in the March qtr. that way, today’s headline ARR was reported to be $58.2m to highlight the $3m new client ARR, but using current (June 30) FX rates (which is the correct accounting treatment) this figure reduces by -$4.4m to $53.8m, their ACTUAL ARR.

I completely understand why they did it. They want to highlight organic growth and not let that be overshadowed by FX. On the call in March, it was the opposite - they wanted to minimise discussion on the role of FX in the ARR number.

The FX change (AUD appreciation) reduced the AUD value of their USD and EUR contracts/revs. It also reduces the USD and EUR expense line.

Everything they have done re delaying ARR to month end to release along with the 4c, as well as reporting headline ARR using last qrtrs FX rates (first time they’ve ever used non current qtr) all makes sense. They are trying to show true growth in the business and not have sentiment damaged by a an ARR headline that goes down. I totally get that. I think they should have just reported actual ARR but with a giant note to point out the $3m of actual new client PnL as well as the actual FX paper PnL loss - but to each their own,

Hope this helps explain what I was referring to.

There was nothing in today’s numbers and content that I found overly negative. I thought it was a pleasing result and know LVTs best days are ahead of us - within reach.

Expand

The churn of N3 also has an impact on ARR numbers. You'd need to remove N3 from every previous quarter's numbers to get a proper comparison. Since it was LVT's decision to end the N3 partnership, the ARR from that deal can't really be counted as regular customer churn.

Smoothed out for FX changes over the past 3 quarters, this is what their ARR growth looks like.

ARR growth has certainly been a bit softer over the last couple of quarters, but given the current economic climate, this ARR growth looks pretty solid.

LVT Price at posting: 24.0¢ Sentiment: Buy Disclosure: Held
19 Upvote

7 Great analysis

Reply

Top Stories

HVN

Consumers cautious according to Harvey Norman, as profit slumps 35% in FY24

Week 35 Wrap: HotCopper’s top watched; ‘iron ore winter’ has started; Oz inflation @ 3.5% MoM; Harris fracking flip

HLX

Helix investor makes partial takeover bid, proposing board changes

LLC

Lendlease sells off US east coast construction operations in latest global divestment push

VYS

Vysarn acquires Waste Water Services Pty Ltd for $7.5M; WWS to become subsidiary as expansion continues

PYC

PYC achieves key designation for drug aiming to treat blinding eye disease ADOA

CCO

The Calmer Co’s Anthony Noble reflects on record breaking FY24

CYM

WA Nifty copper project steps closer to restart with Cyprium Metals inking $40M loan from Glencore

TBN

Tamboran kicks off Shenandoah South pilot project with SS-2H well spud

Consumer Staples Shine Amid Retail Slump – Key Stocks to Watch

There are more pages in this discussion • 109 more messages in this thread...

First 86 Last

Add LVT (ASX) to my watchlist

The churn of N3 also has an impact on ARR numbers. You'd need to...

Top Stories

Consumers cautious according to Harvey Norman, as profit slumps 35% in FY24

Week 35 Wrap: HotCopper’s top watched; ‘iron ore winter’ has started; Oz inflation @ 3.5% MoM; Harris fracking flip

Helix investor makes partial takeover bid, proposing board changes

Lendlease sells off US east coast construction operations in latest global divestment push

Vysarn acquires Waste Water Services Pty Ltd for $7.5M; WWS to become subsidiary as expansion continues

PYC achieves key designation for drug aiming to treat blinding eye disease ADOA

The Calmer Co’s Anthony Noble reflects on record breaking FY24

WA Nifty copper project steps closer to restart with Cyprium Metals inking $40M loan from Glencore

Tamboran kicks off Shenandoah South pilot project with SS-2H well spud

Consumer Staples Shine Amid Retail Slump – Key Stocks to Watch

Featured News