I've been doing in depth research of BIG's strategy for the...

I've been doing in depth research of BIG's strategy for the entrance into the United States market.

Why am I focusing on this now? There seems to be alot of gossip here about a potential update on the US market. People here are expecting an imminent announcement and are anticipating a strong result that will boost the share price to new highs. Obviously, over the last few months the Australian results have been exceptional and the market is hoping that this success can be replicated in the US.

While going over the company's announcements I have noticed some inconsistencies. Forgive me if I've missed something but the way in which they report the breakdown of different markets is not consistent. They gave a breakdown on the 7th of December 2016, in which they said, "the Company has received revenue from UK and US of over $500k". However, a few months later, on the 7th of February 2017, the wording changes slightly to, "Rest of World revenues of $0.7m". Then the theme morphs into a more general tone of, "It is anticipated that overseas revenue will continue to show strong growth."

There is a mention on the 7th June 2017 of a one year contract worth USD $1.2m. There is also the Marriott International deal, but this is just partnering with an app and no mention of revenue. There is talk about "discussion with a number of potential US partners/aggregators", however, there doesn't seem to be any progress on this. So my question is, why haven't US based third party companies rushed in to sign with BIG?

The latest update on the 10th August 2017 gives a more somber tone, "our early sales activity in the US is yielding excellent results, well ahead of our initial expectations." I'm not sure what their expectations are because they must have forgotten to tell anybody. Let's hope they are high and they are not trying to 'low ball' it so the market doesn't get ahead of itself when they do eventually provide a detailed report.

The take away from all of this is that to date the US figures are murky at best and at worst almost non existent. What I can conclude is that the growth is entirely coming from a small proportion of Australian customers as the ARPU over the last 6 months has grown incredibly while new user growth has been very soft.

Furthermore, what we do know about the US strategy is stated in the announcement dated 7th June 2017. "US Census figures recently identified 4 of the 5 fastest growing US cities in Texas. BIG’s focus for Q1 FY17/18 will be to further develop and leverage the company’s growth and revenue in Texas".

So their strategy is to start with Texas first and then expand else where. What I've done is gone back to Google Trends and changed the GEO location to the Untied States and it seems to show evidence of this as Texas is coming up as the only relevant state. However, what's very alarming is that there's no uptrend, which supports my hypothesis that the entrance into the US market has not been replicated.



Bottom line is that in my opinion I don't think there is going to be a significant announcement regarding the US market, if there is, it's likely to be superficial or sparse on detail. It's been a few weeks since they said they were going to update the market. Not long to wait.