I agree with you and Strawman. Think it was a good result and the long term thesis looks on track.

Also agree they should never have given out guidance of 20%+ growth etc. It anchors analyst numbers (they probably pick 17-18% in their models) is if you don’t achieve it like this result it gets hit.

Im going to buy back in.

Great write up. Many thanks @jcmleng

ive been watching from the sidelines for a year or two now, but will likely take a small position if I get some time to do a bit of my own fact checking. There’s probably no rush though.

Great write up. Many thanks @jcmleng

ive been watching from the sidelines for a year or two now, but will likely take a small position if I get some time to do a bit of my own fact checking. There’s probably no rush though.

Today I took an initial RL position of 2,8% in SDR (paid $5.20, and also got it on SM but at $4.96).

Like some others here, I've had $SDR on the watch for a couple of years, and it has never quite made it to the top of the "buy" list. (I explained some of the reservations here before, so I'll not repeat, as I know they are shared by others.)

A few things tipped me towards taking the first step today:

• ARR growth of 22%, with 27.8% transaction revenue growth. OK, its below the target, and there's always a story, but the path is never linear, and I think you have to take the buying oppportunities when the trajectory is "underperforming" if you believe management are sincere in their belief that they will get back to target.
• Good progress on LTV/CAC of 6.1x, which means they now have significant headroom to drive sales and marketing effort
• Stable churn (Without reopening the chestnut that I still don't fully understand how they measure it, or rather that their measure understates how I'd measure it. However, as long as they are consistent it looks stable, so I'm not going to die in a ditch over it. I still wish they'd report NRR.)
• Continued positive operating leverage, %S&M/Rev and %Dev/Rev heading in the right direction, with the latter nuding down again, now that the investment phase in the Smart Platform has passed.
• Cashflow improvement - inflection point in sight, so this is my favoured point to "hop on the bus".
• Room net additions >50% y/y (presumably driven by the focus on larger properties?) - this is nice if it continues, because that's the multiplier for transaction volumes, ultimately.

I'm slightly peeved with myself that I didn't watch the briefing live, as I don't think there is an available recording or transcript. So thank you to @jcmleng and others for the updates, as it is helpful to get your takes on this.

I don't have a well-formed view on valuation at this stage. I've played around a bit and it is still very much, pick your number. I might post a valuation if I do some work post reporting season and feel brave enough to expose it to ridicule! (Warning: my ranges will be wide .... I'm talking $NEU and $BOT wide)

Of course, I am encouraged that at $4.96 it now represents a Market Cap/ARR of 6.4x. While that's still not cheap, it is a damn sight better than when I last looked at the AGM and it was around 9x. I thought I might have missed the bus last time I failed to get on it at sub-$5.00, around the time of the last SM Meeting. But once more, patience is rewarded.

For me, the key at the next report will be to see how revenue growth and, in particular, transaction revenue growth evolves. I'm also keen to see what success they can continue to have in adding larger properties as, with the Smart Platform and increasing importance of transaction revenus, this will be a key value driver.

So, a new addition to my portfolio.

And if the NASDAQ continues to have AI-self-doubt dragging tech down coupled with Trump-Tariff-Whiplash again next week, I'd consider adding more if the SP goes lower. (Fingers crossed. Perhaps tariff is a beautiful word, after all.)

Disc: Held in RL and SM

@mikebrisy , there was no briefing, as has been the case during the previous Half-Years, something that annoys the hell out of me. So you didn't miss anything!

Re: the "target". SDR has been very consistent in its outlook - just checked back to the FY2023 preso: SiteMinder, with the Smart Platform strategy, is targeting 30% organic annual revenue growth in the MEDIUM TERM. I can't recall them ever promising 30% growth in a given FY. If this "disappointment" is the reason the market is marking SDR down, then its another example of the market getting ahead of themselves and providing the opportunity for others to hop on the bus!

With the clear pivot to larger hotels, I suspect the number of rooms added might be a bigger and more important metric to watch rather than the current addition of properties.

@Strawman , could we please see if Sankar would be up for a meeting. The last one was June 2022 - I thought there was one after that, but I may be thinking of an Investor session instead ..

@jcmleng yes, that’s what I like about medium or long term growth “targets” or “aspirations”. IF they are a reasonable representation of what the firm will achieve on average, then you can leverage the volatility of short term market over-reactions. That’s the theory, and that’s what I’ve done today.

So the “miss” was simply an instance of variation below the mean trajectory, to which the market over reaction has presented an opportunity.

Of course, who’s to say the CEO’s medium term goal is right? We’ll only be able to judge in 3-5 years. That’s OK by me.

There are few firms I do this with. Another is Breville ( which I don’t trade on SM).

Just thinking out loud in very simple terms, would the tariffs cause stocks leveraged to travel be a negative? Especially when they are still not yet profitable

Tariffs reduce global trade which could impact travel and hotels and hence SDR.

This is interesting now but all the talk on tariffs is keeping me paused for now.

And maybe adding to AMZN looks more interesting than anything else right now. But then most of merchandise on AMZN is probably Chinese anyway.

Good call @jcmleng, I'll see what I can do

This is what they've said, same with OCL. When management gives aspirational goals, the brokers take is as guidance for some reason.

Ah that it explains it then @OxyBBear

The company fell short of expectations (or, put another way, analysts were wrong! Haha)

Haha @Strawman. I do find it mind boggling though that if a company meets their own guidance but miss analyst forecasts the stock can end up in the sin bin. I guess the price action leading up to the results can also dictate how the market will react to a particular set of results. That is why I find trading the result to be quite difficult.

On the day the market only cares about market consensus not what management says.

Still remember seeing Siteminder had highest Price to sales in Tikr when I screened against SAP and Gentrack. This was at 4.85.

Maybe needs to come back a bit?