I like the fact that they are expanding into new product and...

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Sniperight

81 Posts.

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06/01/21

21:13

Post #: 49991950
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Originally posted by jaluma: ↑

Great summary of key points.
Looking at the presentation link, there are 4 things that stand out for me and why I think there is a big future here.

1. Geographical growthWhile the APAC region has still been growing users strongly (52% last year), the real growth driver is going to be when the US and EMEA regions overtake the APAC region by users and revenue. The FY19 presentation gives the US/EMEA combo 30% of active users and the reality is this will soon flip where APAC becomes 30%, or over time much less one would expect. Huge markets with lots of growth ahead.
Worth noting that for Q1 credit sales, US (14.4%) and EMEA (5.1%) still underperform on a revenue basis, compared to a user basis, so when that catches up (noting they are more affected by COVID-19 as well), that is another growth driver for revenue.

2. Integrations
The level of growth still available through the channel partnerships is astronomical, particularly when you consider my comments above about US / EMEA. 4 new integrations were added in Q1, but not sure on the total at the moment. Being embedded into the ATS platforms and being an integrated part of the recruitment process will continue to drive growth for Xref. Again, I see it a bit like the above, where over time, sales from integration channels may eventually outweigh direct sales, but that is less clear at this point.

3. Xref Lite
This was highlighted in the Q&A I think, where AirWalletX joined the platform and started using it for all the hiring they are doing. Xref called them, offered them support, opportunity to upgrade and customise, not needed, they are all good. As a low cost customer acquisition strategy, this is a highly scalable product and as the respective businesses use it more, they can always upgrade later! As HR people move and change businesses, they can just sign up to the trusty Xref service and show their new employers how good it is!

4.RapidIDThis is starting from a low base, but it grew its Q1 sales by 155% compared to the same quarter last year, let's hope it continues to keep that pace up and it will become a meaningful chunk or revenue, driven by largely the same fixed costs, so plenty of operating leverage.

Expand

I like the fact that they are expanding into new product and service lines. At this price, I think it’s a bargain. I think the rapid ID is a good strategy, lots of money in customer identification services particularly if they target the FS industry. Think about how many customers versus employees a company has, if they can build a good tech stack, like they have with the reference checking kit, I think this stock will fly. I’m in and happy to see where it goes.

XF1 Price at posting: 35.0¢ Sentiment: Buy Disclosure: Held
3 Upvote

0 Great analysis

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