North America ACV about to exceed ANZ, page-49

Thanks for sharing your updated analysis, Pioupiou. Before I fully digest it and comment on it in detail, these are my thoughts:

1. The value of your model is not so much what the actual PBT figures are, but what it shows as the growth trend in PBT, particularly beyond FY23;
2. My own anslysis (which is not quite fully checked and ready to share yet), using slightly different assumptions, has higher PBT than yours in all years primarily because I assume NA can achieve 40% revenue growth from this year on, and I think NEA can keep General & Admin growth lower than your assumed 12.5% pa. IMO this difference between us does not matter for an investment decision. Both outcomes are possible, and I will still be a very happy investor if your more conservative analysis is what actually happens;
3. But what both of our analyses clearly show is the likely growth rate in PBT once profitability is achieved. Your model shows PBT going up by around 2.4x in one year, from $24.8M to $58.3M. My model shows a rate of increase closer to 3x. I have gone 2 years further out to FY27, and if NEA can keep NA growth rates at around 40% and keep costs and expenses under similar control, then PBT goes up by:

• 5x in 2 years after reaching $20M;
• 5x in 3 years after reaching $60M.

This is because of the very large increases in revenue that 40% NA growth converts to in the out years and the higher gross margins by then.

Happy New Year to all NEA investors, and I also wish you good health and prosperity in 2022.