I'd personally be careful in taking her commentary today to extrapolate a fairly precise outcome for Q4FY22.
For over two years now Kate has echoed that FY2022 was a 'break-even' year and that we would begin to see profitability in FY2023. This was echoed throughout the call today.
Firstly, let's define what 'break-even' looks like.
I believe Kate mentioned she expects Alcidion to be break-even on an underlying basis for FY22.
@composer, taking on your EBITDA to Operating Cash flow proxy we can see that ALC achieved -$3.4m in the SQ, $1.5m in the DQ and -$0.4m in the MQ (today). This totals -$2.3m YTD EBITDA using your proxy. Adjusting for the 'one-off' transactions relating to M&A, the MQ (today) changes to $1.6m making the YTD underlying EBITDA -$0.3m
Given that the business is tracking close to being breakeven (on an underlying basis) after three quarters, -$0.3m in Operating Cash Flow to be exact, then we can expect the JQFY22 to be fairly close to breakeven as well.
The difference between my interpretation and yours is really just regarding whether Kate's "breakeven" infers actual versus underlying EBITDA. I believe differently as she constantly used the term "Underlying"" during the call. I also note the 4C announcement was pretty much headlined with stripping out the M&A costs. (see photo below).
Either way, these are fine points of difference in the grand scheme of outcomes for shareholders.
I also wanted to address the following point - "Question is whether or not there are any further M&A costs to be incurred in Q4. In my view, this is unlikely."
From memory (and supported by the following), the Silverlink acquisition had up-to $5.5m in additional "earn-out" costs for successful contract renewals by FY2024.
(Source - Silverlink Acquisition Announcement)
After the implied $2.0m in earn-out 'activated' in the MQ22 (today), I would agree that it is unlikely that any further M&A costs are recognised in the Q4 of FY22.
I'd also note that Kate seemed very cautious about giving any sort of guidance or expectations regarding EBITDA/revenue on the call today.
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