I made some notes for my own benefit, so am sharing them here for those that were unable to make the call. It’s not a complete list of discussion points, but covers the majority.
Nothing earthshattering in terms of major news that might move the price, but plenty of useful info.
Paraphrasing, Yat said: “Gaming is the beginning. The vision of Animoca does not stop at gaming”. This is massively significant imo and will be interesting to track how the company evolves over the next few years. My reading is that they are focussed on gamers for now because a) that is the low-hanging fruit and b) that is their background/expertise, but longerterm we are likely to see the company with major business units beyond gaming.
Most of his talk was about the big picture sector stuff and a bit of time on individual games/business units. The bit that would connect these two (the mid to longterm strategy) tends to be missing. It’s not so much about setting quantifiable targets, but more about adding further colour. The VC and investment activity is considerable, but it doesn’t even get a mention as a Key Business Unit, neither do the accelerator programs/start-up funds.
Unicorn NFT – classy move from the company to reward all shareholders.
Shareholdings in over 150 companies – will be interesting to track how long it takes them to surpass 200. Investments appear to have accelerated over recent months, which is a great sign.
Revenue recognised over 23 months – following the lead of Roblox and others (see below). This is why the recent financial update only referred to Bookings and avoided disclosing Revenues. It is often what they don’t disclose, which is important. Many holders were under the illusion that Animoca is highly profitable, but John Madden confirmed that the accounts will show a loss. “At the current time the company is not recording a profit” (Madden). $2m per month cash-burn on salaries.
It seems like they have finally realised that they must take a conservative approach to revenue recognition. For example, when an NFT is sold for a game that is not yet released, then the revenue is deferred.Deferred revenue (as captured in the Non-IFRS Bookings measure) is a key financial metric as it signals the future revenue that we should expect.
Plenty of good questions were asked. Broadly speaking, Yat gave non-committal and vague answers. He deferred to John Madden for all finance-related questions and John’s answers were much more useful.
How much of TSB does Animoca own? Yat would not confirm what proportion Animoca holds. All we know is that it is above 50%.
Almost 600 employees – 5-6x increase over past year. Finance team of 10. Yat gave a good explanation about recruiting top talent; he was reasonably frank that the delisting has damaged the company’s reputation, so recruitment has been difficult. They should be judged on recruitment over the next 12-18 months. A highly-rated CFO and a much stronger board for starters.
Several questions about raising capital and potential for existing holders to participate. Yat referred to “tactical capital raises” – building allies, opening doors etc. He explained that the failure to produce audited accounts has prevented them from undertaking SPPs alongside institutional raises.
Madden confirmed that they’d be compliant by April 2022, which is when we should expect to receive the audited accounts.
When will we list? Vague answer from Yat. He failed to mention that the company is working towards a roadmap of H2FY22 (previously disclosed by Madden in private discussions). It is the lack of consistency in their messaging and who they choose to communicate with, which remains a concern.
Animoca continue to cherry-pick performance metrics. Look at the Key Business Units slides – complete lack of consistency. They simply use the metric that looks the most impressive. Yat was asked about sharing relevant game performance metrics, but his answer was for holders to go check-out some third-party websites.
