@Strawman I agree, generally, with your assessment. However, .... and here comes the rant ....

I always feel like I am entering a parallel universe (like those Star Trek Deep Space 9 Episodes) when I listen to $CAT's presentations with their Alternative Accounting Reality (AAR!!!). I get a disorientated feeling like my inertial dampeners are malfunctioning, i.e., Will talking about "profitable growth", when 10 minutes earlier I have just finished analysing the statutory accounts, I find it disorientating to say the least!

OpCF was flat, and it is a common excuse to blame the finance team being too busy focused on the acquisitions. I'm not disputing that they were, because one small and one large deal places a huge strain on the finance team. However, the fact is, positive cashflows are pushed into the future without the end goal or the financial framework really having changed. The excuse only works if 1H FY27 shows a material recovery of the outstanding collections, additional to the next 6-months pulling it's weight. So the explanation is verifiable,... in another 6 months time. (sigh)

Basically, it has all becomes a bit more of a "jam tomorrow" story again. $CAT has reached levels of scale, maturity and market penetration that I can't help but ask what it means for the thesis when the cash generation can gets kicked down the road?

I know I am sounding a bit churlish, but I am going to have to have a hard look at the numbers, as I don't think I can continue to sit on a valuation of $5.50 (p50%). There's a bit of helpful detail in the analyst Q&A, which will help me unpack things. I'm not sure where I will land, but like you, my valuation is heading south.

Having said all that, the SP was so beaten up that $CAT remains a solid HOLD, and could even be a strong BUY, although I have a large RL position so I am not adding anymore.

Contrary, to my remarks, Will has a clear and consistent framework and is sticking to it in a disciplined way. It just that's when there's such high share based compensation, high and growing D&A, and the "exceptionals" of a busy M&A year, there is a lot to unpick. To the credit of management, they have provided an analyst fact-pack to help with the detailed work.

On a positive note, I find the product offering and the story more compelling with the inclusion of PERCH and IMPECT - making $CAT more of a total platform offering. It also sounds like they are getting some traction from the feed to broadcasters/streamers.

I'll finish with my favourite exchange from the Q&A:

Analyst: ... "We're seeing some fairly aggressive behavior, and we talked a bit about this at the Analyst Day from StatSports post the Sony acquisition. They're doing some hiring. They've obviously signed this league-wide NRL deal. ... and a lot of announcements on new teams that they've sort of signed up. Are you guys seeing any of that from your end?"

Will Lopes  CEO, MD & Executive Director: "We've added $20 million of ACV in P&H, which is the size of StatSports before they were acquired this year. They're really not having a gigantic impact in our ability to grow."

... Burn!

Disc: Held (RL 10%)

I hold CAT and I think this is an ok result. The market certainly likes it, up 21% so far today.

However, I feel compelled to state the bear case:

1. This is a $1+ billion market cap company with annual revenue of $140 million ($200 million AUD)

2. Despite signing up 5500 professional sports teams, they made a statutory loss of $24 million

3. Their "Rule of 40" metric, using "Management EBITDA" is rubbish. Excludes real costs of doing business that will recur every year. Depreciation / Amortization is $37 million

4. Likewise saying that you are "Free cashflow" positive ($6 million), when you are issuing $26 million in "employee share based payments" is also misleading

CAT is growing at an ok (not spectacular) rate. I accept that variable and fixed costs are under control and growing much more slowly than revenue. They are heading towards true profitability.

But for now they remain a moderately expensive, unprofitable company. I don't like the aggressive accounting. Financial metrics are not as good as they look at first glance

Perhaps around fair value given the growth trajectory and potential.

But definitely a "hold" rather than a "buy" imo.