Is Spacetalk fooling investors about its ‘SaaS’ ARR?Here are the...

Is Spacetalk fooling investors about its ‘SaaS’ ARR?

Here are the reasons why investor scrutiny is required.

ARR is defined as annualized recurring income from software subscription sales and at 100% gross profit margin.

Spacetalk’s reported ’ARR’ is a blend of different types revenue streams, and all at different and some at low profit margins, ie:

TELSTRA SIM cards (MVNO) 37%

SPACETALK App. 70-85%

SMS ???

School Messaging License Fees 100%

So very little of Spacetalk’s reported ARR is true SaaS ARR, it’s pseudo ARR at best, at worst it’s fraudulent representation .

(Life 360 ARR is monthly App revenue at 70-85% gross profit margin, which is the correct measure of ARR).

So under scrutiny, Spacetalk is replacing high margin ARR App with low margin MVNO business, and not being transparent with investors.

Especially now when Spacetalk is desperately raising funds from investors, the company needs to come clean, disclose and provide more transparency around its so called ARR, and report by segment and profit margin, and exclude SMS and School software license fees.

Footnote:

SMS and school annual software license fees are definitely not SaaS ARR for investor purposes and should NEVER be included in ARR calculations.

Doing so is misleading investors and best, and fraud at worst. More scrutiny required.

Clarification response from Spacetalk needed.