@Rocket6 I still follow Felix but don’t hold my research position anymore.

The thesis was nearly bust some time ago as they had failed to show any progress with the land and expand model. Yes the enterprise MRR/ARR was increasing but really only in a linear fashion. The NRR had dropped to less than a hundred and consequently the unit economics were not going to improve.

Then they tried to acquire growth, to monetise the vendor market place, was the next red flag.

As @Bear77 pointed out, the two key departures were the final nail in the coffin.

Wish them the best but no longer following actively.

@Rocket6 I still follow Felix but don’t hold my research position anymore.

The thesis was nearly bust some time ago as they had failed to show any progress with the land and expand model. Yes the enterprise MRR/ARR was increasing but really only in a linear fashion. The NRR had dropped to less than a hundred and consequently the unit economics were not going to improve.

Then they tried to acquire growth, to monetise the vendor market place, was the next red flag.

As @Bear77 pointed out, the two key departures were the final nail in the coffin.

Wish them the best but no longer following actively.

Agree @Rocket6 the Q2 report was not great.

The Dec-25 Nexvia update wasn't that impressive either. I asked a few questions about this but didn't get a reply.

New CEO is needed soon, not a great time of year to have been hiring, should be improving now, hopefully they're taking their time to get it right.

This is only the second quarter post the acquisition of Nexvia but so far this has boosted payments but not receipts so FCF going sharply into reverse.

I half expected FCF to reverse, they managed this closely to get to break even a while back when a cap raise would have been very expensive.

This acquisition was all about revenue synergies, not cost and they raised about $10m more than the purchase price for Nexvia as there was going to be significant integration time and cost.

Mgmt

The last remaining co-founder and MD leaving just after the M&A was shocking timing. Family reasons apparently. Hard to argue with / fact check that.

The Chair leaving shortly thereafter was an even worse look but I did not rate him (founders looking for a compliant chair heading into IPO?) and his replacement is now in situ and looks to be a decent upgrade. Former CEO, MD of Rhipe which grew fast before being taken out a few years ago. Hopefully he is still well connected, so he and Phillpot can smoke out a sharp CEO to execute on the established strategy.

Not expecting much at the half year but they should be about halfway through the Nexvia integration by then so hopefully a progress update on that.

Overall

It doesn't appear to be going great based on the numbers but that's perhaps not surprising given the M&A they're digesting and I don't expect to see much in the way of good news until they appoint a CEO.

The upside remains huge if they can execute on the Nexvia integration, but that's looking like a bigger IF than it was 6 months ago when they pulled the trigger.

The AI eats everything narrative will not be helping the share price. I don't expect them to be as impacted as many - they are niche, vertical, compliance focused, embedded in customer workflows (Supply chain and vendor management). Nexvia should assist further as Enterprise customers and vendors become more integrated through the combined platform but we shall see...

Disc: Held

I briefly had a look at this one @Rocket6 a couple of years ago, noting that they had gone from 40 cps down to 14 cps and I wanted to know if there was any value there, and I decided they were too high risk for me - mostly because I couldn't explain to myself or anyone else why they would or should be successful, i.e. that the upside dwarfed the downside risk, basically I didn't understand the business well enough and why their business model would win out, so that was the risk to me, that I was outside of my circle of competence with them. I think I even held some for a week or two while I was trying to get my head around the business (it keeps me focused on them when I have some skin in the game, even just a little bit) but I soon sold out.

Anyway, when the founder leaves and those with the original vision for the business have all departed, that's a big red flag for me usually, so if I had held them, that would have been enough for me to get out. And their chart tells a story: 40 cps when they IPO'd in '21 down to 7.5 cps in October 2023, then a bounce up to around the 20 cps level and sideways movement for a year before resuming their fall - now down to 13 cps and in a clear downtrend again.

They may be caught up in the world-wide SaaS sell-down, but that's not the main reason why their share price is falling IMO. It was an idea that sounded good early however they never gained enough traction and the idea never really worked at scale; the original management, including the founder, knew this, which is why they left. That would have been a red flag to me. Why would they move on if the business model just needed a little more time to become succesful? They left because it was a dud.

Many succesful entrepreneurs have failed businesses along their path to success, but the better ones know when to move on to their next idea. And those of us who think we know better than the business founders are usually wrong to stick with those companies. If the people who knew the business model and the business outlook better than anyone else have moved on, it's a really clear sign that so should we.

That's a little different if the business has become very succesful and the founder(s) have made heaps of money out of it already, for example Megaport (MP1) looked like a business to get out of (to me) once the founder, Bevan Slattery, quit the Board, sold all his shares and moved on, but MP1 actually went from $5 to $15/share after that. However with that example a serial entrepreneur (Slattery) had already made millions out of MP1 (and a couple of other start-ups) and had some new ideas that he wanted to put his time and money into.

That is very different to a situation like FLX where the company never really takes off before the founders (the people with the original vision behind the business) move out and move on.

That's my take on it anyway, learned through a bunch of mistakes I've made along my investing journey so far.