I did some basic calculations below. Assuming that 1PG only increased booked revenue by $1m per quarter forever, it would still be at break even by the start of 2019 and have $26m in cash. All calculations assume AUD to USD of $0.75c
To put $1m of booked revenue into perspective, 1PG had $763k in new bookings in Q1 2016, which it said was "soft" due to its focus on product development.
$763k equates to $85k for each of the 9 new clients or US$64k. This is roughly 5 curated pools per month per client or a combined total of 45 pools per month for all 9 new clients. That is only 1.5 pools per day for these new clients.
A$1m in sales at an average of 5 pools per month per client is roughly 12 enterprise clients. 5 pools per month x 12 clients = 60 pools per month = 2 pools per day.
You would have to think that if they can't increase booked sales by at least 2 talent pools per day each quarter (i.e. $1m booked revenue), then something is seriously wrong. Especially when you consider that the company said it has "enhanced our product back end which enabled us to handle the demand being requested of 1-Page". An increase of 2 pools per day is hardly demand - particularly when the new system can "deliver curated pools to clients [in] minutes, at large scale". The current $4.9m in booked sales equates to roughly 10 talent pools per day (US$3.68m = 3,675 pools = 10 pools/day).
If you increase quarterly bookings to $1.5m from now onwards, it would break even by the start of 2018 (1 year earlier than $1m quarterly revenue). $2m quarterly bookings (an increase of only 4 pools per day in new bookings per quarter) would break even in Oct 2017.
To break even, it would need A$16m in annual revenue, assuming $US3m costs per quarter (A$4m). Assuming that all revenue comes from talent pools, it would need to serve 33 pools per day (A$16m = US$12m = 12,000 pools = 33 pools per day)
As a peer comparison, FLN is a $750m market cap company. They had positive cash flow of $1.9m in the most recent quarter. If 1PG had $2m quarterly bookings from now onwards, it would have the equivalent cash flow as FLN within 2 years (Jul 2018) and have more cash assets than FLN currently does - both have no debt. Using the same valuation method as FLN, it would be a $5+ stock.
Calculations assuming $1m new bookings per quarter:
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Calculations assuming $1.5m new bookings per quarter:
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Calculations assuming $2m new bookings per quarter:
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