Food for thought with CCP:
Annual FY operating costs are around $2.5 ~ $3M. (Lets use the lower $2.5M in this analysis)
Smart tags sold via channel partners generate $120 pa.
While smart tags sold directly are priced at $180.
The companies direction is to leverage their channel partners at I think 65/35 ratio so lets average a smart tag at $145 pa.
So to reach break even we need to sell over 17 thousand smart tags.
Our current CCV is $730k so we have around 5,000 active smart tags in active subscription.
So we need 350% growth on our current subscription amount to break even.
Below is the CCV growth from Q1 2017 to now.
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
Column 8 |
Column 9 |
Column 10 |
Column 11 |
Column 12 |
Column 13 |
Column 14 |
| 1 |
Customer Contract Value (CCV) |
Q1 17 |
Q2 17 |
Q3 17 |
Q4 17 |
Q1 18 |
Q2 18 |
Q3 18 |
Q4 18 |
Q1 19 |
Q2 19 |
Q3 19 |
Q4 19 |
Q1 2020 |
| 2 |
24 Month CCV |
$ 275,000 |
$ 340,000 |
$ 440,000 |
$ 530,000 |
$ 630,000 |
$ 750,000 |
$ 900,000 |
$ 1,080,000 |
$ 1,296,000 |
$ 1,555,200 |
$ 1,866,240 |
$ 2,239,488 |
$ 2,687,386 |
| 3 |
Increase |
|
24% |
29% |
20% |
19% |
19% |
20% |
20% |
20% |
20% |
20% |
20% |
20% |
We are growing CCV at about 20% average each quarter.
Assuming all stays as is we are pretty far away from returning a net profit.
But realistically we know the company will sign more channel partners and expand into new geographies/countries and the technology is 'morphing' to target new markets as we have seen with these new Ph sensors and so forth.
So in my 'optimistic' model I see us break even 1H 2019.
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
Column 8 |
Column 9 |
Column 10 |
| 1 |
Customer Contract Value (CCV) |
Q1 17 |
Q2 17 |
Q3 17 |
Q4 17 |
Q1 18 |
Q2 18 |
Q3 18 |
Q4 18 |
Q1 19 |
| 2 |
24 Month CCV |
$ 275,000 |
$ 340,000 |
$ 440,000 |
$ 530,000 |
$ 630,000 |
$ 819,000 |
$ 1,064,700 |
$ 1,597,050 |
$ 2,395,575 |
| 3 |
Increase |
|
24% |
29% |
20% |
19% |
30% |
30% |
50% |
50% |
Pure speculation and of course have assumed Opex stays flat.
Just food for thought and I also think CCP are selling the devices too cheap, unless we make a significant footprint globally.
