Ann: Update Revenue growth, operating outcome, customer retention, page-33

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eddyble

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21/09/18

16:08

Post #: 35759651
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Originally posted by Thanky ↑

I'll take a look over the weekend but I did think about whether the MRR figures I suggested using are appropriate rather than revenue with 40% growth rate and leaving out the Zunos acquisition as a separate consideration.

Also I would say that their cash flow is not necessarily linear month by month as they sometimes receive substantial prepayments.

Separately and worth considering is that these prepayments create deferred revenue that is recognised as the service is rendered, see liability section of recent reports. Current liabilities for deferred revenue to be recognised within financial year, and non current liabilities for deferred revenue to be recognised beyond. I'm not completely sure how that works with the 40% growth projections though, since in theory all of the deferred revenue in current liabilities will drop to revenue line this financial year.

In sharing more thoughts I realise how complicated getting a proper handle on things are.

I would be surprised if they don't hit their target though, their institutional shareholders won't be impressed. Now what the whole context is around that projection is another question.

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Pre-payments have nothing to do with RR though. Their claim was that MRR = Op ex or they would be revenue neutral from a MRR perspective.

Regarding linear revenues - i've considered that and given them an advantage by equally weighting revenue growth. In reality revenue growth rate accelerates over time so by smoothing the curve and using a linear approach future revenues are brought forward which has an inflationary effect on their MRR. I could weight it more appropriately based on their historical performance but i wanted to give BTH as many advantages as possible.

That being said the more i learn about BTH the better i think the stock is and i'm in no way saying it's a crap stock. I will purchase BTH eventually, it's just a matter of when

BTH Price at posting: 32.0¢ Sentiment: None Disclosure: Not Held
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