Broker Data, page-8

Cheers. Are Pershing retail? Not really familiar with all the brokers but good to see net buyers instos and commsec net sellers as expected. A bit more of a down day today so its a matter of picking the bottom to top up for me now.

I'll add my own resource to the community here also. I've been playing around with the data and trying to learn R in the process. Firstly, ARR has always (as expected) been followed by a greater amount of yearly revenue. Eg most recently, June19 receivables have allowed us to see if ARR in Sept18 was accurate. The sum of all the revenues since then is $19.6m, vs the reported ARR at the time of $18.6m. So we can expect that in the next 3 qtrs we will get at least ARRJune-RevJune=$40.1-$7.9=$32.2m! My sheet (assuming 20% yearly contracts which are lagged by 1 qtr and 2 qtr revenue lag for qtrly contracts) predicts they will be $32.395m so good to see that all matches up.

I also wanted to show with a diagram what myself and many others have been trying to express to non-believers (I swear we're not a cult...). I think this one shows it most simply. Knowing now that ARR is a conservative estimate for the next years revenue, the underlying profitability of the business can be seen by taking the base costs (staff/corporate and manufacturing/operating costs) from this revenue which is independent of growth costs (marketing and r&d).

As you can hopefully see, we are actually very near underlying profitability. Hopefully this shows the point that LVT are not trying to slow spending. The share valuation will be much, much higher if they are breaking even at a $300m ARR in 5 years opposed to being profitable around $100m due to slowing growth. We cannot grow ARR by more than we did last quarter unless we spend more in growth costs or if our COA continues to decrease.