Felix Group Holdings Ltd

ASX:FLX

Felix Group Holdings Ltd

ASX:FLX
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$0.160 (-3%)
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#252
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Reports (1) My Report Forum Investors
Forum Topics FLX FLX CEO Interview

Pinned straw:
Strawman
Added 8 months ago

Here's the transcript from today's meeting with Felix founder and CEO Mike Davis:

Felix_Transcript_Final.pdf

Some points i'd emphasise:

Felix is not an ERP competitor. Rather than replacing platforms like SAP, Oracle, or Workday, Felix integrates directly into them. It acts as a fit-for-purpose front-end bolt-on tailored specifically for complex supply chain management in capital-intensive sectors. This allows Felix to complement, not compete with, existing systems, which helps enterprise adoption.

Felix is deeply embedded and hard to dislodge. Once integrated, Felix becomes mission-critical for managing vendor engagement, compliance, risk, and tender workflows across large project teams. This deep integration increases switching costs, contributing to strong customer retention and long-term stickiness. Good to see >100% revenue retention.

Network effects are becoming more visible. Mike noted that each new enterprise client brings thousands of vendors onto the platform, accelerating vendor-side adoption at minimal cost. Contractors benefit from a growing base of prequalified vendors, while vendors benefit from exposure to more projects — reinforcing Felix’s dual-sided marketplace dynamics.

Vendor monetisation remains underdeveloped. While vendor revenue has been flat, the growing base of enterprise clients (contractors) is building a rich, engaged vendor ecosystem. The monetisation of this side is still in the early innings but (in theory at least) there's latent potential.

International expansion has been slower than expected. Compared to early expectations, global growth has taken longer to materialise. That said, Mike reaffirmed it remains a key strategic priority, with some “green shoots” emerging via cornerstone overseas clients.

Disciplined capital management is front of mind. Felix is focused on standing on its own feet — they’ve reached operating and free cash flow breakeven, which is commendable in the current environment. Importantly, this is being achieved while continuing to invest in product maturity and future growth opportunities.

Thanks @Trancer for some great questions.
Trancer
Added 8 months ago

Thanks @Strawman . I've just now had a chance to view the session and it is encouraging to watch. Thanks for putting those questions forward.

It's re-affirmed for me that their moat is related to industry specificity, which is helpful to know. It's worth mentioning that I work closely with a few of the major mining and construction companies in the procurement space and without breaching confidentiality by going into specifics, it's worth mentioning that some of the other major players are more established in Australian industry than one might detect by browsing the Felix website and listening to Michael speak.

With this in mind, what will help them to sustain / develop that moat (given that having an ecosystem is not a moat when all your major competitors also have a vendor ecosystem) is how they can effectively reduce the amount of 'box-ticking' work that is really important to business sustainability / continuity, but is tedious and... frankly.. for any vendor management / procurement employee, mind-numbingly boring to perform. So their ability to leverage AI to give time back to Vendor management and Procurement professionals to focus on more sexy / exciting work is something to keep an eye on.

At some point they will become saturated in their focus industries so I suspect that in time they will need to diversify into net new industry sectors to continue to generate growth.

They're now on my watchlist.

17
Chagsy
Added 7 months ago

+1 for the great questions, @Trancer . My apologies for not asking any of my own: I have been off climbing in the backcountry for the last few months and with limited bandwidth (literally, and metaphorically, for strawman).

FLX remains one of my "great white hopes" on the ASX. I have a tiny holding, as such, until I see greater traction.

It remains to be seen whether their capital constraints allow them to iterate and innovate in a timely enough fashion to a) increase NRR with their existing contractors, b) expand the number of contractors, and c) monetise their vendors.

I'm tempted to add more, but am trying to be systematic about the investment process.


14
Bushmanpat
Added 7 months ago

@Chagsy that last sentence is why I'm a strawman member. Keeping your emotions out of the investment decision is one of the most important things to remember and it's reading comments like yours from people way more learned than me that is going to make me, and the rest of us, better investors.

The climbing break sounds awesome!

7