Pipeline is important to discuss, but not lofty pipeline. I'll add onto my post that I did earlier today and give some additional numbers for the last few stages in their sales cycle. Worth noting that in my experience working in Enterprise Sales in Big Tech over the last decade, if we want to have a serious discussion about pipeline, then we need to focus on the last few stages of Droneshields Sales Cyle.
Forget the pipeline that's sitting before stage 5. That stuff has a lower chance of conversion (as reflected in the % DRO provided in the pipeline graph shared below) and what does convert before stage 5 will most likely close from Q1 next year (given DRO stated their sales cycle is 6-18 months). There may be a chance the opportunities that are sitting in the demo stage (Stage 4) could close by Q4.
So only pipeline I will be discussing today is from Stage 5-8, as this is the pipeline that when it does convert, will be seen in this Financial Year. The reason why I am not even entertaining the first 1-4 stages of the Sales Cycle,is due to the pipeline sitting there can be seen as pure "fluff". From stage 3 it realistically isn't, as there would be genuine deals there, however again, it won't be seen until next year if and when it closes. So let's park that for now.
The deals currently in stages 5-8, would've been sitting in stage 1, 12-18 months ago (for context).
I'll give even more conservative conversion rates than what they have provided.
Stage 5 - 192 million (30% conversion) - 57.6 million
Stage 6 - 91 million (50% conversion) 45.5 million
Stage 7 - 33 million (70% conversion) 23.1 million
Stage 8 - 28 million (100% conversion) 28 million
Total Sales from Stage 5-8 = 154 million.
Now let's go ultra conservative with the conversion rate:
Stage 5 - 192 million (20% conversion) - 38.4 million
Stage 6 - 91 million (30% conversion) 27.3 million
Stage 7 - 33 million (40% conversion) 13.2 million
Stage 8 - 28 million (90% conversion) 25.2 million
Total Sales from Stage 5-8 = 104.1 million
IMO these are the sales figures we will start seeing appear over the course of H2 (according to the pipeline shown in the graph below).
Few final points to consider. The above Pipeline conversion is ultra conservative, and in my experience the % Droneshield provided below is spot on, so you can assume sales should be higher than what I provided. However, for forecasting's sake lets go with the ultra-conservative number.
Worth mentioning that their comment about "repeat orders coming through from current customers" which in sales is known as run-rate, will also land this financial year. Any pipeline sitting before stage 4 will most likely close next year, and that won't be seen this FY.
So the story of the graph below seems to be aligning with their talk track that Q3 and Q4 is seasonally their strongest quarters.
Keen to hear people's thoughts if they have any?
(20min delay)