Great write up @Valueinvestor0909.

There were a few things mentioned during the half year conference call that were ignored at the time, and probably becoming more front-of-mind as the full year results approach.

• 1H was boosted by the pent up demand of previously under-supplied Ultimo chips. This also suppressed gross margins for the half as Ultimo is a lower margin.
• Expecting a 48/52 1H/2H split of revenues rather than 45/55 split of previous years.
• Management is cautious of a potential slow-down of demand in 2H. Backlog has returned to pre-pandemic levels. It's hard to understand whether this is a continued normalisation of inventories (OEM reducing inventory held) or waning demand. Not ruling out the potential of the latter.

Management has also changed the way they talk about growth. Previously it was revenue growing at the historical rate (24-32%pa), but as of around a year ago (?) this was switched to gross profit growing at the same historical rate. The reasoning makes sense - the mix of products is less chips/cards/modules and more software run on OEM's own provisioned chips - less revenue but higher gross margin which ends up being around the same gross profit. I thought that was something worth pointing out.

A great write up @Valueinvestor0909. I like your idea of listing and defining your key metrics to determine if AD8 is on track and justify its current valuation. I think I’ll use those myself! Thank you for sharing.