@UlladullaDave great points. I totally agree with you about the immateriality of Rugby Union as a code, compared with US college football and other top tier leagues.

STATSports

However, I wondered whether STATSports have been doing the same in English Football, with Man City, Arsenal and Liverpool - the top 3 position in the EPL last season - all STATSports customers. I've also been watching "Welcome to Wrexham" on Disney+, and there's lots of great product placement of STATSports there too, although in one episode I saw one of the players with a Catapult vest as well, so I am wondering if they are trialling both solutions to see which is best?

So I did some more digging.

STATSports list their clients on their website, and the curernt count is 527. The All Blacks are not listed - but as they are not paying anything, then arguably it is right not to include them. The three EPL clubs I listed above are all shown, and I note that the English FA appear to have made a large commitment to using STATSports at all levels in men's and women's codes, including starting at the Boys Under-15 development squad. From what I can tell, STATSports appears to have started in UKI, and so perhaps just got their hooks into English Football and Rugy early in the game.

So at 527 teams versus 3317 at $CAT, then $CAT is the clear market leader, and appears to have a much stronger footprint in North America.

Follow the Money

You are absolutely right in that given the budgets and stakes in professional sports, $20k ACV for P&H and $40k for Video is a drop in the bucket for these teams. What's critical is to have the best product, and to be at the leading edge of bringing on features the customers want that exploit the emerging technologies.

Thank you also for not mentioning "flywheels", but that's exactly what's at play here, and I'm glad Will also passed up the opportunity to mention the F-word when he talked about "scouting" as an area where $CAT will develop their capabilities - this is one selling point that STATSports push.

I've been doing a bit of research on competition in the sector, and there are quite a lot of alternatives out there. However, as far as I can tell $CAT is the global market leader, with STATSports running second. (I have to firm up my fact base on this.)

Capital Allocation

A key value driver is the rate of addition of new teams ( as well as cross-sells).

On new teams, FY24 over FY23 added 9.4% new teams, from 3031 to 3317. At that rate it takes around 4.5 years to get to 5000 teams. This is consistent with Will talking about the medium terms target and at another point referring to 3-5 years explicitly. With favourable LTV/CAC metrics, $CAT could potentially dial up the heat a little on customer acquisition, particularly once it starts generating some free cash. Upping the rate of additions to 12% gets you there is 3.6 years.

As others have mentioned, I am glad M&A is off the table. The capital allocation choice here is getting the right mix of new customer acquisition and product development. In this stage of the industry evolution, it makes sense from my perspective if all the operating cash is ploughed back into those areas. Secure the market, then drive ACV via features, value-add to customers and pricing. Again, just think of the value of the longitudual dataset acquired over a players career, and the value to be obtained in squad selection, acquisition and divestment! (It makes the analyst in me drool uncontrollably.)

Investment Decision

So, for me the investment thesis in $CAT is building nicely, I like tech global leaders with favourable unit economics and proven management, and with plenty of "blue sky" ahead.

I'm pretty much in line with @Strawman's valuation yesterday, and the 4 covering analysts are showing TPs with an average of $2.29 ($1.75-$2.91) - which all seem plausible. As ever, I personally have a wider range around this, but the risk-reward from here looks good.

$CAT is clearly ticking boxes and kicking goals (sorry!), and so today I've added another tranche in RL and put an order in on SM. I'm not in a hurry to build my full position - have to keep powder dry for potential pullbacks, but I could see myself owning a lot more of this one over time.

Held in RL (2.5%) and SM

It’s sometimes hard for us in Australia to fathom how enormous US collegiate sports is.

Imagine turning down a coaching role for the most famous pro basketball team in the world in favour of an extension at a college.

@mushroompanda this is truly hard to comprehend. I love my sport by 50 mil for a college contract!? Only in the US surely! Still love the opportunity for CAT

@mushroompanda Can throw around incomprehensible numbers to coaches and directors when you don't have to pay your talent!

@Wini and @mushroompanda ...I hope that sentiment also applies to their performance and coaching software and hardware platforms! (Judging by their investments in infratructure, like stadiums, it might.)

(Still can't get over the All Blacks switching to a freebie. C'mon.)

In many US states, the highest paid public officals are the coaches of the state college sports teams.

Huge amounts of money involved!

@Wini I thought they'd changed the laws (at least in some states) about paying college players now?

Catapult is an excellent product but Statsport is also very good.

My understanding is Statsport are sponsoring the All Blacks for 3 years and will be working with them to customise specific aspects including working with other data analytics experts and with SAP who are involved with data analytics within the whole All blacks organisation.

I think it’s important to remember Statsport have extensive history in rugby and a close association with World Rugbys data analytics provider (Capgemini).

The High Performance Athletics department of the All Blacks are led by well respected Dr Nic Gill. You don’t hold down that position for 15yrs+ without making good decisions.

With money not being an issue (The All Blacks main sponsors are two oil juggernaughts - Altrad and Ineos) if they thought StaSport was not up to scratch they would happily have paid for a system.

Note: I was a holder - got out - now looking for a re-entry opportunity. Where I think Catapult has the edge is it’s clear they now have someone who knows how to package and sell a product.

@NewbieHK great insights! All this was news to me.

On the one hand, given that the AB's were with $CAT for several years, I consider losing that account as poor account management. The AB's reputation globally in the code is a huge selling point. As incumbent, Will could have offered a customisation deal/partnership as well. Clearly he chose not to.

Why not? Maybe it comes back to @mushroompanda's point. Follow the money. Globally, professional rugby is a market worth much less than the US College codes. (I'm asserting, without analysis!)

From memory in the interview with Will he made a point about them not doing freebies…I just had a small feeling this point was “over emphasised”.

Now that aside he is the experienced business man and they have the funding and backing to pursue their model of charging top dollar for what they believe is the best product in the market.

It’s possible with Statsport not being as big a company the Sponsorship type arrangement is important to their business model.

Personally I am not sure Statsport is really a competitor. Catapult bought possibly one of there biggest potential future rivals back in 2016 (Playertek). The value for money proposition they were providing was compelling. I think it’s now rolled into their Catapult One suite.

There is a new company out of Italy GPEXE making some waves. I am guessing more will enter the scene as the price of the tech hardware comes down.

However, Catapult is really setting themselves up at the McDonalds in the elite wearable tech space. They have a great product and from what Will said over the next two years they aim to capture a significant market share (5000/20000 elite sporting teams) and focus on cross / up-selling (video).

So in terms of a business model they are really across the “we have a product” now let’s make sure it’s valued appropriately and we make it the product everyone wants (Apple) and can’t do without and price is not a question.

Note: @mikebrissy I work in the sports world so you hear things…

Concur with everyone's comments.

Great session with Will Andrew . Thanks .

Growth in the Operating leverage was a key take out for me providing positive momentum in a market in which they are dominant but still small.

Disc Held in RL