Actually @Parko5, it's not such a great result from my perspective. I exited my entire RL and SM holdings before the close on Friday.

While the maturing of the US was inevitable, the slowdown in US sales to 27.9% in 1H FY25 from 54.9% in 1H FY24, was more than I was expecting - although it was clearly in the offing in the December revenue report, so it is not strictly a Friday surprise. (I have been preparing my response over the summer!)

It is the ROW slowdown that I find staggering. 28.6% growth to a still small base of $12.9m, whereas the 1H FY24 result of $10.0m represented a 122% growth rate on 1H FY23. There is also no mention on any contribution from India. In the context of an RoW number of $12.9m, even something like $0.1-$0.3m from India might have justified a callout of some kind, and we are two years into that market. After all, there is a team of 20+ people who have been on the ground for a couple of years now.

In none of my valuation scenarios does RoW slow down so quickly. And it means that ANZ, UKI and Germany - the largest components - have simultaneously matured MATERIALLY. The other RoW market additions are immaterial.

As you know, I have always been a bull (even a super bull) on $PNV, having held it on and off for 8 years. So this is a big step for me. While I am not in a position to lay out my full analysis today, $PNV has clearly gone from achieving growth rates well ahead of other dermal repair players ($IART, $AVH, $ARX) to now falling solidly into the pack ($AVH doing about 29% and $ARX doing 25%).

As others have commented here, dermal repair is a competitive market. There are many offerings for surgeons to choose from. Overall, the implant category has grown very rapidly over the last decade - led by the US. But when you see such a rapid change in the growth rates, to me that indicates that we are getting increased product-on-product competition. I believe the winners will be those that can field a portfolio of products to their accounts (in the way that $AVH, $IART, and $ARX are doing - although I am not calling these "winners"). BTM and MTX are insufficiently differentiated products. There's been no positive update on the abandoned DFU trials, and other pipeline news is generic/vague. Furthermore, $IART has yet to return to full strength after its product recall and temporary withdrawal, so perhaps this headwind is yet to materialise fully?

So with this rapid slowdown in the revenue growth rates, I've also lost sight of how the cost base is evolving. Total operating expense growth in FY23 was +66% falling to +44% in FY24. So what's it going to be in 1H FY25? Certainy the rate of overall headcount growth going in to FY25 has slowed (254 vs 218 at EOFY23, or +16%), indicating that sales growth rate is still likely well ahead of cost growth rate. So we should get a solid NPAT number in FY25, which will look stellar on a % growth basis, coming on top of a very low base.

The SP consensus of covering analysts of 28.2% revenue growth is about where the company is, which indicates that a valuation in the ballbark of $2.60 is about right (albeit, I get lower valuations if revenue growth declines this quickly.)

BUT, with such a marked revenue growth slowdown from FY24 into 1H FY25, the set up is there for further slowing into 2H FY25. From my perspective, that's a big uncertainty.

Should cost growth not be reigned it quickly enough, earnings growth will not be that strong and at that point the business starts to look expensive. I want to be ahead of that and not behind it!

So, on these numbers, $PNV just doesn't look like the compelling case that it has looked previously. And I think it is now perfectly clear that DW has used the ambiguity around ("we might stop reporting record months") to buy some time for the team.

So Why Did I Sell?

On the face of the revenue numbers, there is still a 17% gap between consensus and today's SP. However, I've now lost confidence in my understanding of the product, its market progress, and the operating economics of the business (because I can't see how costs are evolving, given such a rapid change in the revenue trajectory).

It's not about over-reacting to one result. $PNV has between 500 and 1000 indepedent buyers around the world, and there is no market factor for a slower period from which we will see a future rebound. (Competitor revenue reports make this clear - $PNV's is now growing at a similar rate to its peers.)

So, I have decided to move to the sidelines until I can see the full financials for 1H, and hear more about the momentum in to 2H FY25.

An FDA decision on FTB could be a further catayst for renewed momentum. But they have to prepare the package, submit it, and there we have to wait 6-12 months for a decision.

I just feel more comfortable about this one on the outside for now, and will consider a decision to re-invest after 1H.

Disc: Not held in RL and SM

Also this looks promising

"we had a successful meeting with FDA during which they agreed that we have sufficient data to submit an application for PMA approval. We are in the process of compiling all the material needed for submission.”

Sounds like they are on the fast track for FDA approval.