Hi all @BoredSaint I sat in on this call and make the following points, (disc hold a small speculative position irl, in fact all loss making companies should be speculative at this stage of the cycle). the company is caught in a catch 22 position as i suspect peers are as well, wanting to preserve cash, NTO have reduced headcount including sales. this reduces sales growth. the company chewed through $7m (adj for acq costs) in FH and has $35m cash (all USD). secondly they made a significant acquisition recently and integrating the combined salesforces so they can sell both products is taking time. so large changes in GTM. the revenue guidance was left unchanged but ARR guidance down $66m to $57.5m for Dec year end. indicates less saas sales and more perpetual license etc.
therefore a few things going on, they want to be cashflow breakeven by 2h next year, if i recall correctly. so cutting costs, integrating sales teams and expandng cross ell etc. the US sales team looks like the issue and changes have been made. ADBE and DOCu are the competition. my understanding from various sources is that NTO product is good, but it is a 350ee company up against giants and effective sales is critical. i suspect ADBE arent thinking too much about NTO at this stage and could poach the sales force or mnay other tactics is they felt threatened or buy them. hard to say.
to me the critical issue is getting sales going. i like that they appear not to want to dilute at these prices and are restraining costs but that comes at he cost of strong top line growth at this stage. they are still grwoing. the ceo implied that sales should be firing by Q4 so lets see.
hope this is of soem help
I've often wondered the above question (even though I continue to hold shares). NTO has a very impressive client list but what's stopping ADBE or DOCU from just acquiring the whole business just for the client list. At the current market cap it is worth roughly 1 week of revenue for ADBE to acquire the whole business. My answer to that is that ADBE simply don't think they need to spend the money to acquire even for such a low amount of money. ADBE have a superior product that they probably think will out compete everyone else.
I guess my thesis for still owning shares would be that NTO is able to continually gain market share from ADBE and DOCU without much churn as they are purely focused on the PDF and e-sign products. If however there is increasing churn in the coming quarters, this thesis would be broken.