Felix reported a few days ago. Ive been a bit stretched recently and haven't made any of the calls I wanted to attend. Zero.

Thanks to all the excellent reporting from the usual all-stars - much appreciated

I have had a token holding in FELIX for a number of years, mostly as a way of making sure I keep up with progress, rather than any serious investment case. It's so small as to be barely worth selling. I really like the narrative -see multiple other previous straws.

The report showed a company still losing money and still perilously short of funds. Im not tipping anything into them just yet, for sure. But there were some really positive lead indicators of future success. You can read the full report here

The bits that were positive are the significant increase in MRR and the NRR.

As a brief recap, the thesis rests on the classic land and expand model for SaaS companies.

They get revenue from the contractors (the big engineering companies that use their software) and the small fish that bid for the work (Vendors). The lead indicator of success is signing big contractors on small short term contracts (try before you buy) which then roll Felix's modules out more broadly to the group, and add more modules as they see the value add.

To date progress has been slow with linear increases in revenue, ARR and MRR (monthly recurring revenue) and a cost base that is vastly in excess of cash receipts. They have had a few big names sign up, but incremental revenue has been slow to materialise and they have started cutting their way to success, and executing ever-more diluting cap raises. Yeah.

So the headline figures still aren't great:

But increases in expenses have certainly moderated, and revenue has really started to increase. They report a number of new signings with big international companies but perhaps more important is the increase in work from earlier signings which has translated into a much better shaped graph in the MRR - evidence of traction. Over the last 12 months MRR has had a CAGR of 67% - too infinity and beyond!

This is probably the most telling slide:

This is also substantiated by the NRR of 116% which is pretty healthy.

So much for the good news.

The bad news is how long they fund the runway for profitability. And the news there is pretty desperate:

Management have indicated that they can get through to positive cashflow by Q1FY25

I certainly wouldn't put any of my money on it occurring without another significant dilution.

I really like the idea behind this company, and I think they will get there. It has a rule of 40 value that is attractive : 51 (If my maths is correct). The big question is around timing an entry, and I don't think we are quite there yet. It has the potential to be a complete killer in its category and I hope they make it. Happy to sit on the side lines until the risk reward ratio comes down a bit, even if it means not getting in at the cheapest price.