Just finished my work on this announcement, and the market is...

Just finished my work on this announcement, and the market is completely missing how transformative this is. This easily adds 80% - 120% upside to the current market cap by FY24e without giving credit to other significant organic and inorganic growth opportunities for the business.

The quick maths is that CCG is expecting to spend roughly ~$1m over the next year (half opex, half capex) to make $8-10m in incremental revenue at a ~60-65% EBITDA margin (70% gross margins minus a recurring annual staff cost of ~$500k-$750k). So CCG will essentially add $5m to $6.5m in incremental EBITDA by FY24e vs. the pre-announcement FY23e run-rate of $7m today.

Yes, you read that correctly, CCG has increased it's FY24e EBITDA by 70% to 95%, with scope to re-sell even more products through Vodafone in the future. Assuming this incremental EBITDA is rated at what CCG is currently trading at (7x EBITDA), this means an incremental equity value of $28m to $38.5m vs. $34m today !!!

This goes to show the tremendous optionality at play when backing a proven & aligned management team. This partnership also paves the way to winning additional ones given becoming the quasi-exclusive GLOBAL supplier of UCaaS to Vodafone Enterprise will generate significant inbound interest for CCG.

Disclosure: I have added to my position significantly