Part3–JVandBeamProfitsFor those wanting to know how I estimated...

Part3–JVandBeamProfits

Forthose wanting to know how I estimated Units in Use, ARR, Revenue and Royalties, please refer to my Post #:56113328,16^thSept2021, for Part 1 and Post #:56154981, 17^thSept2021 for Part 2.

For this Part 3, the calculations are quite straightforward. The key variables are:

• The JV Gross Profit Margin, which I have assumed to be 70%. This is what is left from the subscriptions of monthly service fees and other value-added services ZOLEO Inc bills the end user after deducting the direct costs forproviding those services, including fees for GEOS, Mobile Numbers, Access Fees for Iridium, data usage costs, and billing costs.
• The JV Operating Costs. From Beam’s FY21 Annual Report, JV expenses are listed as $986,511. However, Billing and Support Fees are listed among expenses as $183,389, and I understand that these should in future come under the Costs of Goods Sold before the Gross Margin. So, my starting point for Operating expenses is $800,000. I have assumed quarterly values for FY21 to get to this value, and I have also assumed quarterly increases in Operating Expenses of 10% per quarter (46% pa). Normally these costs should rise at a lower rate, but I have been conservative due to the growing costs of servicing growing markets in Europe and Asia, as well as NA and ANZ.

JV Operating Profits are then quite simple to deduce. For NPAT, I have assumed a 25% average tax rate.

Quarter	JV ARR From all Units on Plans ($,000)	JV Revenue ($,000)	JV Pre-Royalty Gross Profit (70% GPM) ($,000)	JV Total Royalties Paid Out to BCC & RP	JV Post-Royalty Gross Profit ($,000)	JV Operating Costs ($,000)	JV Operating Profit ($,000)	Beam Share of JV Operating Profit ($,000)	JV Post-Royalty Operating Margin %	JV Retained NPAT (25% tax) ($,000)
3Q FY20	$-	$-	$-		$-		$-			$-
4Q FY20	$456	$-	$-		$-		$-			$-
1Q FY21	$1,767	$114	$80	$56	$24	$173	-$149	-$75	-256.4%	-$149
2Q FY21	$2,862	$442	$309	$215	$94	$190	-$96	-$48	-42.6%	-$96
3Q FY21	$4,542	$715	$501	$345	$156	$209	-$54	-$27	-14.5%	-$54
4Q FY21	$10,752	$1,135	$795	$562	$233	$230	$3	$1	0.5%	$3
1Q FY22	$15,342	$2,688	$1,882	$1,380	$501	$253	$248	$124	19.0%	$186
2Q FY22	$21,012	$3,835	$2,685	$1,915	$770	$279	$491	$246	25.6%	$369
3Q FY22	$28,032	$5,253	$3,677	$2,571	$1,106	$306	$799	$400	29.8%	$600
4Q FY22	$36,402	$7,008	$4,906	$3,380	$1,526	$337	$1,189	$594	32.8%	$892
1Q FY23	$46,122	$9,100	$6,370	$4,337	$2,033	$371	$1,662	$831	34.9%	$1,247
2Q FY23	$57,462	$11,530	$8,071	$5,425	$2,647	$408	$2,239	$1,119	36.7%	$1,679
3Q FY23	$70,422	$14,365	$10,056	$6,644	$3,412	$449	$2,963	$1,482	38.4%	$2,222
4Q FY23	$85,542	$17,605	$12,324	$8,000	$4,324	$494	$3,831	$1,915	39.9%	$2,873
Note:	How quickly the Beam Share of JV Operating Profits ramp up:
		From $124,000 in 1Q FY22 to $594,000 by 4Q FY22, and then to $1,915,000 in the 4Q FY23
		From $1,364,000 in FY22 to $5,347,000 in FY23