We agree with you Value. We model ARR growth as a dollar amount...

We agree with you Value. We model ARR growth as a dollar amount based on COAS (Cost of acquisition spend) with a lag. In a dumbed down example, if you go from 10 sales people to 11 sales people, allowing for a lag for sales person to get up to speed the quarterly gain in ARR should go from $1 .0 million pre quarter to $1.1 million. The more realistic and more complex model involves forecasting whether the COA is getting more efficient and less efficient because there are many levers to pull and many skillsets and tools that can be used to sell software solutions. For a while, the dollar rate of growth of LVT was steadily increasing for two reasons (1) They were spending more and (2) Their COA was steadily improving, so for each dollar they spent they were getting slightly more sales per dollar. It was a virtuous circle. Then they stumbled in the September quarter and revenue growth was less than we would have expected based on their spend.

Be careful not to confuse LVT's business model. LVT do not build intranets. One of their core products is selling the tools that other people use to build intranets.. The tools are generally known as low code intranet software because they save the cost of writing reams of code for a range of flexible intranet options. With CYCL , yes they have acquired a consulting business that actually helps enterprises install software and build intranets but its not a central part of LVT's strategy and it is not why LVT purchased CYCL.

We think suspect there are several dynamics going on at LVT, that both fall under the heading of "Transition".

Transition #1 : By closely following LVT's marketing materials and looking at the changes to the website, we observe that there is a product transition going on.

Transition #2. Looking at the new emphasis at the product mix and treading, their very public statements (for example see the CEO presentation at the AGM on the ASX filings) , they are implementing a sales transition by investing heavily in a much greater emphasis on a partners channel.

Both of these make it harder to forecast quarterly growth of ARR during the transition. Was the $2.9m ARR growth the new normal or was it a blip caused by transition? If it is a blip, will it last one quarter, two quarters , three quarters or more....or is it already done?

The sell side brokers have gone dark....largely because I dont think they are on top of it.

So Im letting the market do the talking. At the moment the market thinks that September was not just a one off slow down, it is pricing $2.9m ARR growth per quarter as the new normal.

My gut tells me that the market is too pessimistic, but lets wait for numbers.