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The Figures and the Triggers, page-2

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31/10/19

22:03

Post #: 41185402
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Originally posted by Magwheels5: ↑

HELPme get my head around this beast. Ive done some rough calcs on the back of my famous napkin with a few red wine stains in the corner :

LVT averages around 40 customers per quarter so 160 a year which 1 every 2 and 1/4 days.
Average Spend new per customer in last 6 months Is 116k – 73 new customers adding 8.5m in ARR ( 5.6+2.9). Due to how figures are reported I don’t know how many existing customers exited, reduced or increased their spend but im going to work off the most recent average of $116k+10% say 130k
So im expecting 160 new customers per year adding 160*$130k =$20.8m or 5.2m per quarter
However to reach a target of 100m by June 21 they have 7 quarters to get 57.1m which is a tad over 8m a quarter.
If they achieve that the share price should be worth $1-$1.20 based on 8* and 10* ARR as ARR is 100m*8 = *800M/800k shares = $1
My calcs at $130k per customer @ 40 a ¼ only get $5.2 per quarter which is $2.8m per quarter under the target ARR.
So to get $8m per quarter we will need the average of 40 new customers spending $200k ( which is 85% increase on last 2 quarters average spend ) or 60 customers ( 50% increase on average customer numbers last couple of years )spending around $130k per quarter $7.8m or a combination of both.
I think they will need to increase spending to get there – I cant see it any other way – can you ?
Currently they spend $16m per quarter to get 40 new customers ( and loo after current)so $400k a customer whom add an average of say $130k per year for 10 years so $1.3m ( average yearly spend would increase overtime as well). I cant see how they can increase customer and market share with greater spend. I may be wrong happy to be corrected
An extra $4m per quarter would add say 10 extra customers as a hard line but as most costs are fixed then id say you would get 20 as your COA should decrease im guessing ( could be wrong). So they can get 60 customers a ¼ ( increase of 20) ARR will increase by 80*$130k = $2.6m per quarter at a cost of $4m per quarter so breakeven would be pushed out a few years for a greater ARR and increased chance of another raise

If theygrow at the target rate of $8m per quarter ( last 2 quarter half that onaverage )which is $32m per year then in 5 years ARR should be $200m , valueingLVT at 10* @ $2B and therefore the shares around $2-$2.50. This is a nice %gain for sure but fairly risky. The other point to note is that $130m ARR = 1%of the market so at current growth they would only capture another 1.25% of theestimated market in 5 years. This seems a long period of time to capture what canbe a changing market. So to capture more of the market LVT need to add morecustomer per year and the spend per customer needs to be greater.

My figures say 2 years from now ARR would be $42.9m+(2*20.8) = $84.5m ( without greater spend)

Help me ifim going nuts but I think the cap raise is to increase customer growth numberswhich has been flat for 2 years at 40 a quarter , sure av spend has increasedand the bigger fish is what we a chasing but last quarter we hooked fewer fishand they were a more than a tad smaller.

Anyway ivethrown the bait out there , need some bites to work out if am I reeling in thebig one or another tiddler !

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The customer acquisition and revenue projections will not be a diagonal line up. It will be an exponentially increasing curve with new ARR quarters being larger than the last (there will be seasonal influences). With the increasing ARR and actual received revenue, they will (and can) in turn increase spending on sales, marketing and development to secure ever increasing customer and ARR growth.

So you are right in your thoughts. This is all part of the plan from LVTs management.
Read VMKs post on the investor call in the 4c thread. He puts it more eloquently than I ever could...
LVT Price at posting: 30.0¢ Sentiment: Hold Disclosure: Held
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