Interesting article in Livewire today by Ben Richards of Seneca Financial. I hadn't heard of them before. It's a new fund but they have beaten the Small Ords over the past year that it's been running. Anyway, it's a decent read on takeover plays in Aussie small caps and he makes a thought provoking argument below for why Catapult is an attractive option.

Catapult Group International Ltd (ASX: CAT)

Catapult Group International is a global leader in sports technology and analytics, specializing in wearable devices and video solutions that monitor and analyze athlete performance. Its wearable GPS trackers, famously visible on players across sports like AFL, soccer, and rugby, provide critical data on metrics such as load management and fatigue, while its video solutions offer tactical insights for coaches and teams. By converting traditional intuition-based coaching into a data-driven approach, Catapult has become a must-have tool for professional sports organizations worldwide.

Catapult is poised for significant growth, supported by strong tailwinds in the professional sports industry. The global sports tech market is projected to grow at 17.5% CAGR to $40 billion by 2026, driven by increasing media rights values, the rise of sports betting, and growing fan engagement through social media and streaming platforms. With only ~21% penetration of an addressable market of ~20,000 elite teams, Catapult has ample runway to expand its user base and cross-sell products. Emerging trends such as the professionalization of college sports, rising investment in women’s sports, and integrated video-wearable solutions further amplify its growth prospects, positioning Catapult as a key beneficiary in the fast-evolving sports landscape.

We mentioned CAT as a buy to our Good Research subscribers when the stock was trading at $1.96 just 3 months ago. With shares now trading +88% higher today, and +53% since we wrote this article on Livewire, the thesis is still largely unchanged.

Synergies:

We see Catapult as a global sports tech platform that can be scaled up significantly into a large addressable market. Data is the new oil, and Catapult holds the key to professional athlete performance data.

Acquiring Catapult unlocks synergies through product integration and cross-selling. Catapult’s wearable technology and analytics tools can be combined with an acquirer’s platforms to create comprehensive solutions, while its global client base provides opportunities to cross-sell and expand into sports media, ticketing, or fan engagement markets. Integrating Catapult’s player data into broader ecosystems can enhance customer experiences and generate new revenue streams.

The acquisition offers cost efficiencies through streamlined operations and supply chain optimization, while a larger acquirer could scale up Catapult’s R&D budget to accelerate growth through new product development. Catapult’s data can also drive advanced AI tools for injury prevention, performance forecasting, and tactical insights. With a strong presence in elite sports and opportunities in grassroots markets, the deal positions the acquirer as a leader in sports analytics, strengthening their competitive edge and growth potential.

Scarcity:

Opportunities to gain exposure to the rapidly growing professional sports industry are exceedingly rare, particularly in public markets and even more so in Australia. In the US, assets in this sector are scarce and often held by private equity or billionaires as trophy investments. Catapult stands out with a strong, hard-to-replicate market position, underpinned by proprietary technology in wearable athlete trackers and video solutions for coaches.

Over the past decade, Catapult has built and acquired a comprehensive suite of software and wearables, establishing a robust network of professional organizations that would be difficult to replicate from scratch. Now entering a cashflow harvesting phase, CAT presents an attractive opportunity for financial investors seeking exposure to the professional sports sector.

Gettable:

CAT has an open register, with the board holding approximately 17% ownership. This substantial stake reflects strong alignment with minority shareholders and suggests that any potential takeover would likely require board approval, ensuring shareholder interests are well-represented.

Cheap:

CAT is currently trading at 4.9x EV/Sales, with a robust ~20% annual top-line growth and impressive 75% incremental profit margins. The business also offers significant growth optionality, with new products like the NCAA sideline video tools yet to be reflected in sell-side analyst models. Additionally, the potential to secure a major deal with the NFL represents a substantial blue-sky opportunity.

Given the valuation benchmarks for software companies, we believe any acquisition would likely occur at a multiple of at least 6-8x EV/Sales. Factoring in a reasonable takeover premium, this could propel CAT’s valuation to over $5.00 per share.

Who might buy it?

Private equity firms, such as Silver Lake (City Football Group, New York Knicks), CVC (rugby leagues, Formula One), and TPG (tech/media interests), are likely contenders, drawn by CAT’s market-leading wearable technology, recurring revenue streams, and opportunities for operational efficiency and bolt-on acquisitions. With CAT under-geared and trading on just 5x EV/Sales, private equity buyers could leverage its strong market position to scale growth and enhance profitability.

Global technology giants like Apple, Google, or Microsoft might also see strategic value in Catapult’s player-tracking and analytics capabilities. Integrating this technology into their health, fitness, or AI ecosystems could enhance their platforms and deepen their reach into professional sports. Similarly, sportswear and equipment manufacturers like Nike, Adidas, or Under Armour could embed Catapult’s solutions into their wearable products, offering athletes and teams a complete performance ecosystem.

Additionally, media and entertainment companies such as ESPN, DAZN, or Fanatics could utilize Catapult’s analytics to enrich broadcasts and fan engagement platforms. Whether through data-driven insights for viewers or enhanced performance metrics for athletes, Catapult represents a scarce, high-value asset in the growing sports technology landscape, making it attractive to a wide range of strategic and financial buyers.

Why now / what's the catalyst?

CAT's profitability is inflecting, and it's entering an attractive cash flow harvesting phase, demonstrating strong operating leverage in its recent financial performance.

The key metric to call out from CATs recent 1H25 result was its exceptional incremental profit margins. The company achieved an impressive 75% incremental margin in the first half of FY25, well above its medium-term target of 30%. This reflects strong profitability from newly signed teams and product sales. Notably, this performance builds on incremental margins of 43% in FY24, a significant improvement from 19% in the first half of that year, underscoring CAT's growing operational efficiency and ability to capitalize on revenue growth.

A key catalyst for CAT is its looming inclusion in the ASX200 index. With its market cap now at $1.0 billion, CAT is nearing the ~$1.2 billion threshold for inclusion in this premier index, tracked by passive ETFs and institutional mandates. Such an event could drive significant upside, as seen with other high-performing ASX-listed technology shares like Pro Medicus (ASX: PME) and Wisetech (ASX: WTC), which have re-rated to P/E multiples of 204x and 97x, respectively. These stocks benefited from strong capital flows and their scarcity as tightly held, high-quality tech shares on the ASX, particularly following the exit of Altium after its takeover (~50x EV/EBITDA).

This is the link to the full article if you're interested - https://www.livewiremarkets.com/wires/the-4-common-traits-of-small-cap-takeovers-and-our-top-8-targets-for-2025?utm_medium=email&utm_campaign=Trending%20on%20Livewire%20-%20Wednesday%204%20December%202024&utm_content=Trending%20on%20Livewire%20-%20Wednesday%204%20December%202024+CID_d3a295bfd0e137ce6b1c2dcb34f0da8f&utm_source=campaign%20monitor&utm_term=ACCESS%20THE%20INSIGHTS

From 22 Nov 2024 on Livewire, commentary from Forager's Steve Johnson. Interesting that CAT is now a 11% position in the Forager Aust Shares Fund - that can only be high conviction! The "transition from illiquid small cap to widely held growth stock is well and truly underway" comment was an angle I had not given much thought to, but augurs well for more upside ...

Discl: Held IRL and in SM

----------------

Catapult Group International (ASX: CAT) is the largest investment in the Forager Australian Shares Fund. Its half-year results justified our optimism.

It was a result difficult to fault and there is no obvious impediment to Catapult’s momentum. Its customers, professional sports teams, are growing in number and size. Catapult continues to take share from its rivals. The best part of the recent result was the accelerating growth in its newer video segment, where Catapult faces more robust competition (the main wearables business is five times larger than its nearest competitor). It is now generating positive free cashflow and has the capacity to invest heavily in product development alongside its margin expansion. We anticipate it growing at about 20% per annum for some time to come.

Our thesis is well and truly on track. The only question is valuation. Catapult’s share price has tripled over the past 12 months, taking its market capitalisation to a touch over $900m (US$585m). We have been buying all the way up and, after the past week’s share price appreciation, the Forager Australian Shares Fund’s weighting is above 11%. That is a large percentage of the portfolio, even by our concentrated standards.

Firstly, on valuation, we still think it stacks up. On our numbers, the business can generate nearly US$200m of revenue by financial year 2028 and over US$300m by 2031. By then it should be doing 30%+ margins after share-based compensation and, fully taxed, generating something like US$80m in net profit after tax.

It will matter a lot how much growth remains ahead of the business at that point. Even if the growth has slowed, it should still be worth 20 times earnings. If it’s still growing 20% per annum, it could easily be a 40 multiple. This is a global growth stock. That would give Catapult a $2-4bn+ valuation and could place it inside the ASX 200. Obviously, the high end of that range is an optimistic scenario and there is plenty that can go wrong between now and then. But Catapult can still be a good investment on much more modest assumptions. And, in the near term, we are willing to risk a higher weighting than normal while the rest of the market gets its head around this business.

In the five trading days since Catapult’s half-year result, over $80m worth of shares have traded. That’s more than the prior 40 trading days combined. Despite its $900m market cap, this is not a widely held stock among Australia’s larger small-cap managers (most likely due to prior disappointment). They are likely to get on board now that the business is profitable and the stock liquidity has improved. Bulge-bracket research firms are likely to commence coverage and Catapult should qualify for inclusion in the ASX 300 index next time changes are announced, bringing passive index buying to the market.

In short, the transition from illiquid small cap to widely held growth stock is well and truly underway. We won’t let it become irresponsibly large, but are willing to tolerate returns volatility while we capture as much of the near-term upside as our risk tolerance allows.

Impressive results from whichever angle! I really like the transparency that management have provided in terms of its targets, across the Board. This has really helped in managements narrative as to how improvements in the operational KPI's lead to other good things - the story could not be any clearer for me.

I prefer to compare the results Half-on-Half instead of YoY to gauge ongoing momentum, as there was already a sharp step up from 1HFY24 to 2HFY24. The HoH comparison clearly shows the ongoing momentum across all the key metrics but does temper the achievements a bit. A few things to call out from a HoH perspective:

• Lifetime Duration improved by 0.6 years, a 8.6% improvement
• Multi-Vertical Customers was up a whopping 47.3% - this is good evidence that the Expand Go-to-Market approach and integration with video is really kicking in
• Free Cash Flow was up 50% HoH
• Rule of 40 increased by 5% - this is really good to see following the 6% increase from 1HFY24 to FY24
• Revenue was up 14.6% but expenses only went up 9% - cost control has been sustained - a good sign of things to come
• Tactics & Coaching revenue spiked 31.1% but margins are lower in this segment, hence the 4.1% fall in margin HoH - one to watch out for
• Variable Cost % on Revenue actually went up from 52.2% in 2HFY24 to 52.4% - still bloody good, but it does make the dip in the ratio from the slide pack, which compares YoY, less bullish. The next 7% to get to 45% will be the hardest as the easy steps have already been taken, so I expect this ratio to only marginally drop HoH from here.

CAT Is absolutely firing on all cyclinders but there is still a lot to come. This is my favourite slide that shows the promised land:

It was also good to see the Capex taper off - Will did say a lot of the hard technical platform work was done to enable scale, in the early months of his coming onboard. This is now payback time!

Onward and upward!

Discl: Held IRL and in SM

Sports tech. firm $CAT reported their 1H FY25 results.

My overall assessment - good, steady progress. 1) Good revenue growth 2) Importantly, $CAT achieved incremental profit margin of 75% (which I think is what Will has consistently said the goal is.) and 3) Ongoing innovation, particularly with the sideline video product. Video in T&C is growing very strongly, with strong ACV gains being a leading indicator that this will drive ongoing revenue growth.

Their Highlights

• Annualized Contract Value (ACV), Catapult’s leading indicator of future revenue, grew 20% on a constant currency (CC) basis year-on-year (YoY) reaching US$96.8M (A$143M)

• Revenue increased to US$57.8M (A$85M), +19% (CC) YoY

• The profit margin on the incremental revenue generated reached 75% YoY; delivering Free Cash Flow (FCF) of US$4.8M (A$7M)

Catapult delivered another strong performance from its core SaaS verticals, with ACV growth of 20% (CC) YoY. This reflects the addition of US$10M of incremental ACV half-on-half (HoH), the largest incremental dollar ACV increase in any previous half year period. Catapult’s core SaaS metrics continue to demonstrate the embeddedness of Catapult’s product solutions into team workflows, with:

• ACV Retention consistently strong at 96.2%

• Customer Lifetime Duration increasing 7% YoY to 7.6 years

• Pro Team Customers increasing 7.9% YoY to 3,470 Teams

My Quick Assessment on Cashflows

Continuing good progress. 5th consecutive positive operationing cashflow and 3rd consecutive FCF.

Operating leverage showing through in cash flows: Receipts +21.6% to pcp, Payments +17.4% to pcp, leading to OpCF +34% to pcp.

Investment continues to fall as a % of Revenue.

What's good to see in the chart below is that costs continue to be well-managed, while top-line growth continues. (look at the relative slopes of the dotted blue and orange lines)

$CAT took the opportunity in the period to pay down $6m of debt.

Disc: Held in RL and SM

2229 GMT - Catapult's contract with England's national and top-tier rugby teams shows the Australia-listed sport-tech provider delivering on its cross-sell strategy, Jefferies says in a note.

Analysts point out the deal represents the first major publicized contract for both Catapult's wearable and video products.

They also see Catapult's unseating of a long-term incumbent as a positive.

Catapult is scheduled to report its 1H result next week. Jefferies anticipates an 18% rise in revenue, a 19% rise in gross profit and free cashflow of US$4.8 million.

Jefferies has a last-published buy rating and A$2.40 target price on the stock, which is at A$2.73 ahead of the open. ([email protected])

(END) Dow Jones Newswires

Decided to investigate the small 4.8% pop in CAT today after reading mumblings about a English Rugby Union deal. This looks to have driven the pop, but the only ASX announcement from CAT today was details of its results announcement.

Perhaps this was a non-material contract value to not warrant an ASX announcement, but it did seem to me that it broke new customer ground and looks pretty all encompassing. Cricket is my game, so do not understand the significance and standing of these organisations in the Rugby Union world.

But not a bad place for a shareholder to be in if deals like this is now "non-material" and BAU!

Discl: Held IRL and in SM

English Rugby Deal

Catapult Signs New Multi-Year Deal with the Rugby Football Union, Premiership Rugby, and Premiership Women’s Rugby

October 30, 2024 at 04:00 am EDT

 Share

Boston, MA, Oct. 30, 2024 (GLOBE NEWSWIRE) -- Catapult (ASX: CAT), the global leader in sports technology solutions for professional teams, today announced a new deal with the Rugby Football Union, Premiership Rugby, and Premiership Women’s Rugby that will bring Catapult’s innovative athlete monitoring technology and video integration to rugby union in England. The strategic partnership marks a significant milestone in advancing athlete performance with the national England men’s and women’s rugby teams, Premiership Rugby, and Premiership Women’s Rugby.

As the preferred provider of athlete monitoring technology, Catapult will make available to the men’s and women’s national teams, Premiership Rugby, and Premiership Women’s Rugby teams its full performance analysis suite, including the Catapult Vector System, offering a comprehensive understanding of both team and individual performance. The integration of Catapult Vector with MatchTracker gives coaches a detailed visualization of on-field dynamics, allowing them to sort, filter, and rapidly access insights enabling practitioners and coaching staff to identify patterns and trends in player performance. Additionally, Focus captures multi-angle video and data during games and practices, enhancing decision-making and tactical adjustments. Together, these tools will empower the Rugby Football Union, Premiership Rugby, and Premiership Women’s Rugby practitioners and coaches to make informed choices on strategy, athlete performance, and injury management.

The agreement also includes the Catapult Vector Rugby Analytics Suite, Elite Vests with integrated heart rate, and ClearSky Local Positioning System (LPS) to further enhance player performance tracking and analysis. The Catapult Vector Rugby Analytics Suite is specifically designed for rugby, employing advanced algorithms to monitor key actions such as scrums, kicks, lineout jumps, and contact involvements. The Elite Vest for women athletes optimizes sensor placement for improved heart rate signal quality, while the Elite Vest for men athletes enhances fit and data accuracy with an inlaid chest band that stabilizes sensors during intense movement. ClearSky LPS will be installed in national team venues including the Allianz Stadium and Honda England Rugby Performance Centre in addition to a number of domestic training venues including for teams such as Bristol Bears and Gloucester Rugby providing low-latency, real-time data during training and matches.

“We are excited to begin this new partnership with three of the world’s most respected rugby organizations, the Rugby Football Union, Premiership Rugby, and Premiership Women’s Rugby,” said Kieran Dannatt, Vice President of Strategic Partnerships and Development of Catapult. “By investing in Catapult’s technology, the Rugby Football Union, Premiership Rugby, and Premiership Women’s Rugby are building a sustainable model for the future of rugby. This partnership ensures that the Rugby Football Union, Premiership Rugby, and Premiership Women’s Rugby teams have cutting-edge technology that enhances both team and individual athlete performance and player care, further solidifying English rugby’s position as a leader in rugby innovation.”

With Catapult, the Rugby Football Union, Premiership Rugby, and Premiership Women’s Rugby will gain significant advantages in data management and sharing across club, league, and game levels. Each national and domestic team using Catapult will establish its own performance thresholds and operational zones, enabling tailored training strategies throughout the season. This data will seamlessly synchronize with the league’s and domestic team’s overall data architecture, enhancing information flow and improving insights across all levels of rugby. Additionally, Rugby Football Union, Premiership Rugby, and Premiership Women’s Rugby players will benefit from consolidating their performance data directly to Catapult OpenField Cloud. This integration will enable enhanced performance analysis, strategic planning, and collaboration across teams, leagues and the National Governing Body.

“It has been a long-time objective to align player tracking technology across all areas of the professional game,” said Duncan Locke, Head of Technical Performance at the Rugby Football Union. “The partnership between the Rugby Football Union, Premiership Rugby, Premiership Women’s Rugby and Catapult will provide players and practitioners access to a range of best in class products to optimize how players are managed and drive game-wide insights through standardized data capture and integrated data and video analysis. Utilizing Catapult ClearSky technology we can now monitor performance with unprecedented precision. This not only elevates individual and team performance understanding, but also supports player management through consistently and efficiently capturing and monitoring player workloads and movement patterns across all club and international environments, aligning with the Rugby Football Union’s commitment to player welfare and safety.”

”Premiership Rugby is excited to partner with Catapult Sports, making available the latest player tracking technology to our teams,” said Matt Cross, Head of Science and Medical Operations at Premiership Rugby. “By providing practitioners with comprehensive and individualized data using Catapult technology, we empower them to make informed decisions to prioritize player performance and safety. It has been a long-term ambition to align player-tracking technology across the elite game in England, and this partnership provides the opportunity to make this technology available to clubs, allowing for seamless data sharing to support players transitioning across different environments from both a performance and welfare perspective.”

“As a player, having access to detailed performance insights like this is a game-changer for us and ensures every player in Premiership Women's Rugby can operate at the highest level," said Marlie Packer, Co-Captain for the Saracens Women. “Catapult athlete monitoring technology will allow us to track our progress, manage our workload, and refine our skills in ways we couldn’t before as we play in the best women's league in the world. It’s exciting to know that we’re supported by tools designed to prioritize both our performance and our long-term health. This partnership is helping us elevate our game and align with the highest standards in rugby.”

Have noticed an increse in SM selling of CAT in the past 1-2 weeks coming through my alerts. While buy and sell movements happen all the time in SM, the number on CAT just seemed more frequent than "normal" ..

Would really appreciate if you could share your thought process for selling on SM, and if that sale was mirrored IRL as well. Keen to test if there is something I am missing from my own CAT thesis as I am quite the opposite - bullish and looking to top up IRL on further weakness!

Discl: Held on SM and IRL

15% selldown (remains 5 million shares) worth a couple of mil…

Adir Shiffman (exec chair)

just for noting

Change of Director's Interest Noti...

Change of Director's Interest Notice

No. of securities held prior to change

Direct

Nil

Indirect

6,042,100 fully paid ordinary shares comprising:

5.609 tuly paid ordinary shares

BBHF Pty Ltd <A Shiffman Family A/C>

416,100 fully paid ordinary shares

A & R Shiffman Superannuation Pty Ltd as trustee of A & R Shiffman Super Fund 17,000 fully paid ordinary shares

Class

Fully paid ordinary shares

Number acquired

Nil

Number disposed

1,000,000 Fully paid ordinary shares

Value/Consideration

Note: If consideration is non-cash, provide details and estimated valuation

A$2,120,000.00

No. of securities held after change

Direct

Nil

Indirect

5,042,100 fully paid ordinary shares comprising:

BBHF Pty Ltd

4,609,000 fully paid ordinary shares

BBHF Pty Ltd <A Shiffman Family A/C>

416,100 fully paid ordinary shares

A & R Shiffman Superannuation Pty Ltd as trustee of A & R Shiffman Super Fund

17,000 fully paid ordinary shares

Nature of change

in buy-back

21 August 2024 - On-market sale of

1,000,000 fully paid ordinary shares

Part 2 - Change of director's interests in contracts

No dis chose as is a company, interests which come within paragraph i) of the definition of *notifable interest of a director should Detail of contract

Not applicable.

Nature of interest

Not applicable.

+ See chapter 19 for defined terms.

Appendix 3Y Page 2

01/01/2011

Whilst this is not directly about Catapult, I thought it is worth a listen for those interested in the sports data market that Catapult competes in. My big take aways were:

• The athletes are more valuble than the clubs so there are big budgets available for small increments in performance.
• Video is the way of the future for athlete tracking.
• Recent rule changes for the NCAA college sport system in the US which will see increased spending on athletes.
• Clubs can profit from trading athletes but they need the data to choose the best fit for their team
• Games without a timeout are harder to formulate? (I couldn't get my head around that)

https://www.insidetherope.com.au/podcast/episode/8fed8b92/ep-177-paul-francis-investing-in-elite-performance

chart Update 25th July 24

I deleted my last Chart from today as I have changed my position.

This one was too complicatedto describe so click the link to my google drive to see the screen recording. :)

OLD LINK DELETED

Apparently that one doesn’t work ( ill get better at it)

try this one

https://drive.google.com/file/d/1ujyR6S7DgcYGl_jQUIApK0qU-LXidWi1/view?usp=sharing

Anyone that read my last straw this morning for CAT please disregard that one. I will follow up with a Screen recording instead as I have changed my opinion on it after analysing the chart for the past 3 hours

Chart Update thurs 11th July 24

Boy, any stocks that are bullish at the moment, you would put in the Very bullish category, Take Drone Shield and Catapult for example. These 2 stock just haven’t retraced back to what are considered historic Fibonacci levels at all.

It looks like we are seeing a really nice impulsive w(i) of w3 up (I like to ses that). As you know my rule for entry is seeing the 1st 1/2, (i)/(ii) up, then enter as its just climbing out of the bottom of w(ii). That said let me put some numbers to that. It should drop back to 1.83 - 1.88 for w(ii) (as long as it stops today at 1.97 ish which it should). See if targets move ahead more than expected, then so too do the retraces they make.

So once I see what I believe to be the bottom of the next retrace down ( that determined by seeing it starting to climb of its bottom) then I will buy here. That should be around the $1.90 price and ill then put an alert for approx 1.80 in case it drops back below my purchase price. If it drops to this alert then I will re evaluate my decision to stay in or not.

Chart Update Mon 1st July 2024

Well Cat is finally starting its pull back for the 4th wave down. Todays candle is very aggresive to the downside. You can see my target box with the bottom being in the range 1.56 - 1.67. It may not go as low as the 1.56 (or 38.2% of the last wave 3 as a rule) as it's still a bullish stock. Just have to see how it plays out.

Not surprised that this company has catapulted up the strawman rankings since the meeting with Will Lopes last week. And the share price is following.

CATAPULT BECOMES EXCLUSIVE PROVIDER

TO BRAZILIAN NATIONAL FOOTBALL TEAMS

Nice to see management make an announcement and properly not mark it as price sensitive.

Not all our small cap Boards/CEOs quite follow the rules (not mentioning anyone in particular… who might have featured on other posts this morning!)

I'll upload the recording shortly, but just wanted to get some key thoughts down while they are still fresh.

• I very much got the sense that Will is playing the long game, and is (rightly) not afraid to make investments where needed -- even at the cost of near term profitability.
• The SBG acquisition and re-tooling of the full product set to use that as the underlying platform is a great case in point. As discussed, that couldn't have been an easy sell given the financial profligacy of the former management and the demands of the market at the time, but it has established a firm technological foundation for the business that will enable more efficient product management and enhancement
• To be clear, that investment is largely done now.
• There remains a lot of opportunity in other adjacencies, but Will said that for the next 2-3 years the focus is on prosecuting the existing opportunity which is showing strong traction.
• fwiw, he reckons Catapult could be a billion dollar revenue company in time (a 10x from here) -- although wise to take that with a grain of salt. It has the potential, but there's a lot of work ahead to get there.
• He's not competing on price, and that seems to be how StatSports tries to differentiate itself (according to WIll). He mentioned some teams that had left Catapult for the cheaper solution, but had since returned to Catapult.
• Since he started he's been very consistent in his vision and strategy -- shifting to subscription, building a firmer base and a more holistic offering and (importantly) ensuring some operating leverage is realised. The company now retains a 46% of every incremental dollar of sales. So, in theory, we should see profit growth exceed revenue growth. The medium term target is a 30% profit margin.
• In wearables, he thinks the company can, in the medium term, win 5,000 teams (out of an estimated 20k globally) and that each team pays US$20k per year just for wearables. So that's a US$100m revenue opportunity in wearables alone. They've said elsewhere that 50% of these should also adopt the video solution.

All told, a great product in a fast growing and under-penetrated market where they remain the dominant player, with lots of future optionality and (finally, hopefully) a robust and scalable business model. Importantly, the company looks to be sustainably past the breakeven inflection point

Shares are on ~3x revenue, but on a 15% net margin (they are targeting 30% operati8ng margin in the medium term) you'd be looking at a PE of ~20.

[Held]

@Strawman Nice short sharp interview with some great insights.

If you add the 43% profit margin (slide 30 of FY Results Preso and referred to by Will) to the $100m incremental sales for medium term growth, the scenarios are more about does it taken them 3, 4, 5 or 6 years to get there. Then what's the exit trajectory to becoming a $1bn company over the longer term.

You can be sure that once every pro player in every code is streaming data fully integrated with video, then there will be scope for huge innovation for both player, team and audience benefits. Imagine a future where in real time, sports commentators can analyse mistakes and run real time what-if video scenarios. Surely that's not far off with AI video generation? Just think what sport broadcasters will pay to be first with that capability.

I couldn't resist the All Blacks dig, as I only realised in my pre-meeting research this morning over breakfast that they have switched to STATSports. What I learned from Will is that the were stolen by a FREE offer. As @Strawman said, this is a race to the bottom, but it is potentially a dangerous situation if your major competitor makes a FREE offer to the market leader, and then uses that credential to sell into the league. Will said they are leaders in Rugby, but the fact is that 10 out of 20 teams in the 2023 RWC (according to STATSports) use the competitor. Now that's a strong calling card for that code.

Therefore, coming back to long term revenue growth and margin, I wonder how that's going to evolve over time. As the "green space" is filled out over the coming small number of years (we can assume all 20,000 Pro Sports Teams use the tech.,) then product innovation, AI adoption/algorithms is going to be key as the market leaders more often go head-to-head to win accounts and try to switch key accounts.

So, with pricing and innovation as two levers, I wonder how well Will has read the market? This is an unaswerable question, and at the end of the day, you have to decide whether to back the CEO. He has certainly earned some credibility with the calls made over the last 3-4 years.

So that's what's going through my head as I crunch the numbers and think about whether to give this a bigger allocation.

Disc: Held in SM and RL and evaluating

Catapult referred to the same “rule of 40” in their recent presentation as Xero. Cash flow much better last update, but not much left in the bank. Interesting that their web traffic is steadily increasing. I assume they have real time data access through their website but would be interested in hearing from anyone who has used their platform. Seems like something that would be fairly sticky once it becomes popular. Bought some based on the above recently IRL.

Steve Johnson from Forager covers Catapult in this interview - https://ausbiz.com.au/media/some-of-those-small-caps-are-worth-a-large-interest?videoId=36142&utm_medium=email&_hsmi=310030752&utm_content=310030752&utm_source=hs_email

Drop for w4 before starting wave 5 up.

Is w3 up finished, hard to tell right now. It may push back up to the $2 mark however im now focused on wave 4 down to add again to my remaining position. My next target is the 1.55 - 1.67 target box. I will state though that wave 4 is usually a drawn out wave before it starts wave up. Wave 4 can be so long it can produce fake break outs to the up side then to fall away again. I sold out 3/4 of my position at the recent top and now have the last 1/4 there to add to again at the bottom of wave 4 providing me with a buffer.

I know a lot here leave the bulk of the stock and only sell out small portions. For me however I cant do that as Im getting in on this stock towards the top of a cycle, so I build then take & repeat. If I had got in back in say May 2023 ish for around the 0.65 - 0.70, then I would be playing the long game like yourselves. On the next major pull back which will be somewhere after wave 5, I will enter for more of a long play then.

I got out as last Friday's bar was above/outside the Bollinger Bands, meaning it was at an extreme of more than 2 standard deviations from the norm and also because it hit my Fib target (actually broke above it) and was showing signs late friday afternoon before close that the orders were staking up to get out. I had been watching the order book (buy and sales as well as the size of the orders).

Ill keep an eye on the chart and update as it plays out.

My quick take is that this is very positive.

very low churn (falling)

prolonged lifetime customers

increased saas revenue share (higher quality)

still has a long runway

buying in real life but only topping up a decent position (adding to a winner here)

keen for @ strawman’s thoughts as the longest suffering shareholder in this particular business

UNLEASH POTENTIAL

CATAPULT GROUP INTERNATIONAL LTD ABN 53 164 301 197

75 HIGH STREET, PRAHRAN, VIC, 3181 AUSTRALIA

1

CATAPULT.COM

CATAPULT’S REVENUE UP 20% REACHING US$100M (A$152M)

Free cash flow increased to US$4.6M (A$7M) on SaaS Revenue growth of 24%

M A Y 3 0 , 2 0 2 4

A L L F I N A N C I A L S A R E I N U S D U N L E S S O T H E R W I S E I N D I C A T E D

Catapult Group International Ltd (ASX:CAT, ‘Catapult’ or the ‘Company’), the global leader in

sports technology solutions for professional teams, is pleased to announce its financial results

for the financial year ended March 31, 2024 (FY24).

F Y 2 4 H I G H L I G H T S

• Annualized Contract Value (ACV), Catapult’s leading indicator of future revenue, grew

20% on a constant currency (CC) basis year on year (YoY)

• The Company hit a milestone revenue mark of US$100.0M (A$152M), up 20% (CC) YoY

• Profit Margin improved +125% YoY resulting in US$4.6M (A$7M) of Free Cash Flow

Commenting on the results, Chief Executive Officer and Managing Director, Mr. Will Lopes,

said “FY24 was a historic year for Catapult. Our growth momentum continued, underpinned by

our SaaS solutions, lifting Revenue past $100 million US dollars, or over $150 million Australian

dollars, a major milestone for any ASX listed business. Our SaaS strategy delivered great ACV

growth, driven by new customers but also buoyed by increases in ACV per team as cross selling

accelerated with our New Video Solutions. More importantly, FY24 was a major inflection point

in our journey towards profitability and building a world class SaaS business. We saw strong

growth in our profit margin, accelerating us to improved levels on the Rule of 40 – an important

valuation metric for SaaS companies – as we kept 43% of every new dollar we generated in

Revenue, and increased our Free Cash Flow to $4.6 million US dollars. The foundation is now in

place for top-line growth and bottom-line expansion as we capitalize on the global opportunity

ahead of us.”

S A A S D R I V I N G T O P - L I N E G R O W T H M O M E N T U M

Catapult delivered another strong performance from its core SaaS verticals, with ACV growth

of 20% (CC) YoY. Catapult’s core SaaS metrics demonstrate both the benefits of a scalable

and repeatable business model, and the embeddedness of Catapult’s product solutions into

team workflows, with:

UNLEASH POTENTIAL 2

CATAPULT.COM

• ACV Retention improving to 96.5% up 30 basis points YoY

• Customer Lifetime Duration increasing 15.9% YoY to 7.0 years

• Pro Team Customers increasing 9.4% YoY to 3,317 Teams

In Performance & Health (P&H), its SaaS vertical that includes wearables, ACV grew 23% (CC)

YoY, generated by market segment expansion and geographic success. The Company

experienced success signing new teams and leagues in soccer across LATAM and EMEA regions,

and baseball across North America and APAC. This reinforces that Catapult remains the

partner of choice when teams and leagues are evaluating the best available solution for athlete

monitoring, management, and recovery.

In Tactics & Coaching (T&C), the vertical inclusive of Catapult’s video solutions, ACV grew 15%

(CC) YoY, an increase from its 11% growth the previous year, driven by an acceleration of its

New Video Solutions ACV growing 44% (CC) YoY. Expansion in EMEA and North America with

new customers in soccer and motorsport were highlights. The focus on acquiring new logos

continues to generate strong results, with teams using its New Video Solutions growing 77%

YoY. This acceleration of growth represents an ongoing validation of the Company’s

investment into its Video Solutions, reinforced by the attractiveness of the strong unit

economics they deliver. Further, the Company saw its market segment expand in this vertical

with its entry into Sideline Video analysis in American Football, which was not yet represented

in its FY24 ACV.

Catapult continued to demonstrate the effectiveness of its Land and Expand strategy, with

Multi Vertical Pro Teams, those who adopted more than one Catapult solution, increasing 32%

YoY (48% when run off products are excluded) to 483 Teams. The effectiveness of this strategy

can also be seen in the rise of the average ACV earned from each Pro Team, which increased

more than 7% (CC) in FY24 and is now approaching US$25,000 per Pro Team. With the early

results of this strategy cross-sell remains a significant opportunity for the Company.

R E V E N U E , P R O F I T A B I L I T Y , A N D C A S H F L O W M I L E S T O N E S

Catapult reached several financial milestones in FY24. Total revenue grew to US$100M,

up 20% (CC) YoY, underwritten by accelerating SaaS (ACV) revenue which increased to

US$82M, up 24% (CC) YoY. Revenue growth, together with a disciplined approach to costs,

generated a Contribution Margin of 46%, a strong increase from 34% in FY23. This enabled the

Company to generate a Management EBITDA (Catapult’s measure of profitability) of

US$4.2M. Catapult also exceeded its 30% target of incremental profit margin for FY24,

delivering an incremental profit margin of 43%.

Catapult delivered on its guidance to generate positive Free Cash Flow (FCF) in FY24,

generating FCF of US$4.6M, a US$26.2M improvement YoY. Importantly, FCF of US$3.2M in

the second half of FY24 significantly exceeded FCF of US$1.4M generated in the first half of

FY24. This was a significant achievement given FCF has historically been lower in the second

half of the financial year. This performance reflects a diligent approach to cash management,

and Catapult is in a strengthened financial position at a time when the Company exits a multi-

year period of investment.

UNLEASH POTENTIAL 3

CATAPULT.COM

During FY24, Catapult made a net repayment of US$4.7M of funds drawn down from its

existing debt facility with Western Alliance Bank. This leaves the Company with an existing

debt balance of US$11M. Catapult has extended this facility, which was due to mature in

December 2024, with a new maturity date of May 2027.

Commenting on the results, Mr. Bob Cruickshank, Chief Financial Officer, said “By every

measure our business has performed extremely well this financial year. The growth of our

revenue to $100 million US dollars, underwritten by ACV growth of 20%, highlights the strong

performance we are generating in our core verticals. This growth, combined with disciplined

cost management and a focus on returns, has enabled us to significantly improve our

profitability and incremental profit margin, and demonstrates the operating leverage that we

have in our business. Delivering $4.6 million US dollars of Free Cash Flow is an outstanding

achievement and a milestone the Catapult team can all be proud of. The extension of our debt

facility to 2027 is also a great vote of confidence in Catapult, ensuring we retain the flexibility

to manage our ongoing business needs.”

I N N O V A T I N G A N D E X P A N D I N G I T S P R O D U C T S O L U T I O N S

Catapult continued to develop new product solutions in FY24, delivering on the investments

made into Research & Development (R&D) initiatives. These included:

• Vector Core: An expansion of its Athlete Monitoring system solution that is designed to

extend usage beyond the First Team down to the academy level of Pro Teams with

portability of data

• AI for Formula 1: Introduction of a new AI solution to help F1 manage track limit violations,

with race reviews now completed in seconds versus several hours previously

• Next Gen Vest: A new best in class integrated heart rate data vest with improved comfort

and wearability that eliminates the need to use a 3rd party HR monitor

• Race Control for US Motorsports: An expansion of its world class race control solution into

American motorsports including exclusive support in NASCAR, INDY, and IMSA

• Remote Athlete 2.0: The newest generation of its remote athlete solution designed to

enable athletes to collect data away from their team’s training facility with key features to

support its growth within Baseball and European Soccer

• Sideline Video for NCAA: As the market for live video analysis to be used in real-time for

the first time in American football opened, Catapult launched its new sideline solution with

a new exclusive deal with the largest collegiate conference, the SEC. Catapult’s new

solution provides real-time access to video and data to empower coaches to make

informed decisions instantaneously along with expediting post-game review by providing

immediate access to game footage with coaches’ notes, evaluation of plays, and data for

each clip from the game.

F Y 2 5 O U T L O O K 1

Commenting on the outlook for the Company, Mr. Lopes said “In FY25 our objective is to deliver

on our strategic priorities with a focus on profitable growth. We continue to expect ACV

Growth to remain strong with high retention rates. We will remain focused on our go-to-

market strategy, through a measured approach in balancing our growth and profitability as a

1 This section contains forward-looking statements. Do not place undue reliance on them as actual results may differ, and may do so materially. They reflect Catapult’s views as

at the time made, are not guarantees of future performance and are subject to uncertainties and risks, such as those described in Catapult’s FY2024 financial report. Subject

to law, Catapult assumes no obligation to update, review or revise any information in this section. See the important notices on page 5.

UNLEASH POTENTIAL 4

CATAPULT.COM

reflection of our focus on the Rule of 40, ensuring cost margins continue to move towards our

long-term targets. Profitable growth is also anticipated to deliver higher Free Cash Flow in

FY25 as our business scales.

Despite a razor-sharp focus on profitable growth, innovation remains at the heart of

everything we do at Catapult. And we will continue to innovate on behalf of our customers in

FY25, helping them make even better decisions with our technology. We will continue to invest

in our platform and develop the next generation of devices.

With our unique and comprehensive all-in-one technology SaaS solution, I am confident in our

outlook and the critical role we provide in helping unleash the potential of every athlete and

team on earth.”

F Y 2 4 R E S U L T S W E B C A S T B R I E F I N G

The FY24 results webcast briefing will be hosted by Mr. Lopes and Mr. Cruickshank at 9:30am

(Melbourne time) today. To access the briefing, participants will need to pre-register at the

webcast link below. The briefing will be accessible using the same link from 9:15am (Melbourne

time) today.

Webcast briefing link: webcast.openbriefing.com/cat-fyr-2024/

Authorized for release to ASX by the Board

For further information, please contact:

Investors: [email protected] Media: [email protected]

A B O U T C A T A P U L T

Catapult exists to unleash the potential of every athlete and team on earth. Operating at the

intersection of sports science and analytics, Catapult products are designed to optimize

performance, avoid injury, and improve return to play. Catapult works with more than 4,200

teams in over 40 sports across more than 100 countries globally. To learn more about Catapult

and to inquire about accessing performance analytics for a team or athlete, visit us at

catapult.com. Follow us at @CatapultSports on social media for daily updates.

UNLEASH POTENTIAL 5

CATAPULT.COM

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements including plans and objectives. Do not place undue reliance on them as actual

results may differ and may do so materially. They reflect Catapult’s views as at the time made, are not guarantees of future

performance and are subject to uncertainties and risks, such as those described in Catapult’s most recent financial report. Subject

to law, Catapult assumes no obligation to update, review or revise any information in this document.

DEFINED TERMS AND CALCULATION METHODOLOGIES

In this document, unless otherwise indicated:

“1H” for April 1, 2021 onwards, is each period starting April 1 and ending September 30, with the first such period being 1H FY22;

“2H” for October 1, 2021 onwards, is each period starting October 1 and ending March 31, with the first such period being 2H FY22;

“FY” for April 1, 2021 onwards, is each period starting April 1 and ending March 31, with the first such period being FY22;

“ACV” or “Annualized Contract Value” is the annualized value of all active subscription contracts in effect using an average

exchange rate to US$ over a 1-month period ending on the ACV Effective Calculation Date;

“ACV (CC)” or “ACV constant currency” is ACV calculated on a “constant currency” basis, which is calculated using an average

exchange rate to US$ over a 1-month period ending on March 31, 2023;

“ACV CAGR” is the cumulative annual growth rate in ACV (including on a “constant currency”) over a period A to B, which is

calculated as the annualized growth rate (expressed as a percentage) of (x) the ACV as at the Effective Calculation Date for B;

divided by (y) the ACV as at the effective calculation date for A. Therefore, for example, the ACV CAGR for 1H FY22 to 1H FY24 is

calculated as the annualized growth rate (expressed as a percentage) of (x) the ACV calculated as at September 30, 2023; divided

by (y) the ACV calculated as at September 30, 2021;

“ACV Churn” is the reduction in ACV from the loss of customers over a period, which is calculated as the quotient (expressed as a

percentage) of (x) the reduction in ACV from the loss of customers over the 12-month period prior to the Effective Calculation

Date; divided by (y) the total ACV calculated as at the date that is 12 months prior to that Effective Calculation Date;

“ACV Effective Calculation Date” for ACV is, unless otherwise stated March 31, 2024. The ACV Effective Calculation Date for ACV

denoted as “Opening ACV” or “Closing ACV” is ACV calculated as at, respectively, the start or end of the relevant period. Therefore,

for example, the Opening ACV FY24 Effective Calculation Date is April 1, 2023 and the Closing ACV FY24 Effective Calculation Date

is March 31, 2024. ACV denoted as “1H” is calculated as at the end of the relevant period. Therefore, for example, the ACV 1H23

Effective Calculation Date is September 30, 2022, and the ACV 1H24 Effective Calculation Date is September 30, 2023;

“ACV Growth” or “ACV YoY” is the growth in ACV (including on a “constant currency” basis), which is calculated as the quotient

(expressed as a percentage) of (x) the ACV calculated as at the Effective Calculation Date; divided by (y) the ACV calculated as at

the date which is 12 months prior to that Effective Calculation Date;

“ACV Retention” is the retained ACV from continuing customers over a period, which is calculated as (1 - ACV Churn), expressed as

a percentage;

“Fixed Costs” is the total of General & Administrative (G&A), and capitalized and non-capitalized Research & Development (R&D)

costs;

“Free Cash Flow” or “FCF” is cash flows from operating activities less cash flows used for investing activities, excluding cash used

for acquisitions of, and investments into, businesses and strategic assets. FCF excludes AASB16 lease payments;

"Incremental profit” over a period is calculated as the incremental Management EBITDA over that period;

"Incremental profit margin” over a period is calculated as the quotient (expressed as a percentage) of (x) the incremental

Management EBITDA over that period; divided by (y) the incremental revenue over that period;

“Lifetime Duration” or “LTD” is the average length of time that customers have continuously subscribed for Catapult’s products or

services as at the effective calculation date, weighted by each customer’s ACV as at that date;

“Management EBITDA” is EBITDA excluding share-based payments, severance, and purchase consideration; and including

capitalized development expense;

“Multi-vertical customers” is the number of customers that, as at the effective calculation date, use a product from more than one

of Catapult’s verticals;

“pp” means percentage point, which is the arithmetic difference between two percentages;

“Recurring Revenue” is SaaS Revenue, plus Media, and plus other recurring revenue that is not attributable to ACV;

“SaaS Revenue” or “SaaS (ACV) Revenue” is revenue attributable to ACV; and

“Variable Costs” is Total non-capitalized COGS, Sales & Marketing (S&M), and Delivery Costs.

This document should be read in conjunction with the above definitions and calculation methodologies as they are integral to

understanding the content.

NON-IFRS INFORMATION

While Catapult’s results are reported under IFRS, this document also includes non-IFRS information (such as Management EBITDA,

EBITDA, Gross Margin, Contribution Margin, Free Cash Flow, Annual Recurring Revenue (ARR), Annualized Contract Value (ACV),

Lifetime Duration (LTD), ACV Retention, and ACV Churn. These measures are provided to assist in understanding Catapult’s

financial performance given that it is a SaaS business. They have not been independently audited or reviewed, and should not be

considered an indication of, or an alternative to, IFRS measures.

GENERAL

The information in this document is for general information purposes only and does not purport to be complete. It should be read in

conjunction with Catapult’s other market announcements. Readers should make their own assessment and take professional

independent advice prior to taking any action based on the information.

Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages

may not precisely reflect the presented figures.

I'm looking forward to reading other SM reports on $CAT today, as I am focused on other things today and won't make the call, but I've just noticed their headlines:

• Annualized Contract Value (ACV), Catapult’s leading indicator of future revenue, grew 20% on a constant currency (CC) basis year on year (YoY)
• The Company hit a milestone revenue mark of US$100.0M (A$152M), up 20% (CC) YoY
• Profit Margin improved +125% YoY resulting in US$4.6M (A$7M) of Free Cash Flow

My quick calculation of FCF is $2.767m (OpCF $31.703 + InvCF -$27.055 + Leases Repaid -$1.972m), however, I've not checked the change in working capital on this.

And of course, this overlooks the hefty non-cash share based compensation element of $9.7m. Which I think means we are being diluted about 4% each year - correct me if I'm wrong.

All that said, the 6-month view below indicates that $CAT has made the transition to a sustainable business. If they can keep on this track. (Note: H2 receipts is seasonally weaker, but look at the cost control. Can they sustain this?)

I recently dipped my toe back in the water with $CAT in RL and SM. I'm still not convinced, so will have to have a harder look at this when I get the time. The slope of my FCF line is promising, however.

Its gone a bit lower than id like however look at yesterdays last candle on the hr chart

Lots of volume sold, however it was gobbled up resulting in a pin bar bottom. Kets hope for the rise hey.

Im looking to add more. The way this is setting up with an AB in place, Im feeling there's a reasonable chance it will have another leg down for the C wave where I will be adding more to my position. Of course you could all break my thesis as Im letting you all in on my game plan however I hope your Volumes wont be to big to destroy it for me. :)

Here is the 30m Chart to show you my thoughts

Good luck all

I just penned an article about the Catapult turnaround thesis at A Rich life:

https://arichlife.com.au/a-closer-look-at-the-catapult-group-international-asx-cat-turnaround/

If you are interested. Happy to get feedback.

I said Id let you all know when I was starting to build a position. It may still go lower where i will buy more and progressively more as it climbs out of the 1.32 - 1.40 zone

Yesterday confirmed my thought as it tested the 15 on the 1day chart though wasnt successful and also showed the dreaded gap on the stochastic between current movements (white line) and the longer term trend (yellow Line). It pulled back quiet hard on yesterday’s daily candle and seems to have now started the 5 wave C wave down. Im expecting a target now of 1.36 - 1.30 at worst. 1.36 is my target however we will see how the bars form over the next 3 days.

Tuesday's 1D chart around 12pm before the drop back

The Green circle on the stochastic and the low volume on the last green bar shown above suggested it would drop.

Wednesday mornings (todays) chart

& the 1hr for more detail showing the 5 waves down

Looking at the 1hr chart here it also make me feel it could just bounce around in between the 50 and 200 then explode up, so it might not even make it down to my target. Again who knows, Ill wait for some confirmation before I make any solid decision

Thats my game plan.

Good luck all

MMM careful here. Its sitting in the wave iv zone and usually w(iv) is extended. Im seeing a possible ABC pattern here which would take use down to the 1.30 ish area. So im still hanging out for an entry Just my opinion.

1hr chart

MMMM well lately its has been a little difficult to pick the movements and how they will end up panning out. For now Im still seeing a short term down side. Here's what my charts are looking like for now

1 hour chart

So my target is somewhere in the 1.47 to 1.41 range.

That range coincidentally also converges with the 15 sma, & support (the Pink horizontal line and my wave IV zone on my 3day chart. MMM nice set up if it makes it there.

3Day chart

Here's the kicker. You can see the thin blue rising trendline just under todays candle on the 1hr chart. That is forming a consilidattion triangle. If it doesn’t drop below that today ish then it may push higher and not play out my declining wedge pattern shown in Yellow. Again, I will say, Im not sure on direction and will just have to watch and see. Im not putting a larger position on as yet until I have better confirmation of which is going to play out. (also not Jeffries has recently put a price target on for 1.90 which is at the top of my next target box for w3)

Also Im away for anyone who is reading my thoughts so wont post all the time. However I am watching each day and will let you know if I make any decisive moves.

Good luck all

Helllllo Catapult (a nice update)

Well that one dragged on and approx a week ago I wasnt certain if there would be another small leg down to my anticipated box marked (V) on the charts. I have missed out before getting the bottom, hence why I bought in a start position at the green horizontal line. Glad I did after this mornings move.

You will notice the white horizontal dashed line just above the pink horizontal support line. This is where wave ii should have fallen to historically. It never quite got there, again showing a bullish sentiment and boy has it popped. I expect it to climb to the top of the rising Channel into my wave iii target box and also coincidentally Jefferies Brokerage price target however I'm going to build a bigger position on the pull back to wave iv. I will probably skim off the 10% or so profit @ wave iii however I will leave the original position there for the add too at the wave iv for the next big leg to wave v of wave 3.

Good luck all

Still waiting, the charts since my last update coud be read as we are still in an extended 4th wave down (whiuch can be typical of a 4th wave) with the 5th still to come as i mentioned in my last post or it could even look like its done the 5th wave and is just wiggling about till the market gets a little excited.

I have entered a smallish position already @ 1.255 a week ago and will act further when I see some kind of decent signs to the upside

Im starting to layer in a position, here's why.

1Day chart

30m Chart

Ignor the last green bar up on the 30m chart after I took this screen shot, that was me starting my position. See timiing is impossible really though I do have targets and Im now conflicted if this is the bottom or we still have another small wave 5 down to go. So im staring to build my position. I think the graphs above show everything Im thinking. I do believe it will soon move up with some energy.

The circle on the stochastic indicator on the 1d shows the current (white line) to be above the Yellow (longer term 30m position) which is point pointing down. Thats the only reason I see another drop coming to approx. $1.19 - $1.16. There is a lot of support between 1.13 to 1.19 with moving averages and a historic Support level in there as well.

The market has also been pre empting reporting season lately and building up positions before hand incase of a good report (Drone Sheild, hence why it dropped on a great report, they pumped it up too far).

If this plays out how I expect it to then I will be adding substantially to my position taken today and will be holding much longer term to ride the 3rd, historically the largest, wave up.

Good luck all hope this gives some insight from a technicals perspective.

More good momentum-related news from CAT this morning.

PWHL League Win for Video Solutions

• CAT announced a new partnership with the Professional Women’s Ice Hockey League (PWHL)
• Empowers all 6 PWHL teams with CAT’s cutting edge video solutions to enhance game strategies and performance analysis
• Catapult’s video solution will equip the league with a transformative toolset to elevate the speed, efficiency, and impact of video analysis.
• League-wide + Women Sport + Video - a good win on all these fronts

2024 - Year for advancement of technology in Women’s sports 

• Catapult recently surveyed over 700 industry experts and one of the pivotal trends set to reshape the sports technology landscape is the growth of technology in women’s sports. 
• According to Catapult’s recently published report “2024 Sports Trends & Predictions”1, 2024 is poised to be a landmark year for the advancement of technology in women’s sports with an overwhelming 80% of industry professionals anticipating a larger role of sports analytics in this domain. 

This makes sense given the prominence in women sports in 2023 - Matilda’s, AWFL, Women’s Cricket successes, particularly. CAT is very well positioned to capitalise on this.

Discl: Held IRL and in SM

Update on Cat charts

This is a bullish stock im also hungry to be part of. We can all see by the agressive moves up over the last year and is playing nicely to my targets so far. It has almost satisfied my rules when it finds this next bottom (wave(ii) of the larger wave3) and I will be layering in a sizeable position with a hard stop loss below. My target should be @ the $1.12 SP however when its a bullish stock as this one is, they dont always make it to my targets and proceed to rocket up before reaching them. I will probably take a smallish position before it reaches my target then layer in once I see that its heading up as I predict. Its a fluid choice of course and will take it day by day.

The next wave up (wave3 of 5) is going to be great and is usually the most bullish of any 5 wave structure. As you can see Jeffries (brokerage firm) has a target of $1.50 however I feel it may go even higher (wait and see) See my updated charts below.

Good luck everyone.

Will Lopes interviewed on Forager "Stocks Neat" Podcast https://podcasts.apple.com/au/podcast/stocks-neat/id1601739181

A Good overview of the past, return to cashflow positive and future...

Update on CAT. Thought I would update the charts for cat as it drove higher than my last post (should have seen that coming as it was pushing for the top of the incline channel). So looking at it now it seems to be in a side ways consolidating period. Im still waiting for a retrace back for wave (ii) down to aprox 50% of the last wave marking somewhere around 1.14 my new revised target after it pushing higher than i originally thought. I have noted Bell Porter has down graded Cat from BUY to HOLD confirming my thoughts of an impending retrace. So here is what my charts looks like now.

I have put alerts on it for the bottom pink support line (and coincidently the 50% mark of the last big wave) and also on the 50sma on the 1 day chart to alert me its heading in my target direction. FYI im looking to enter on the next major pull back. Ill let you know when it gets down there as to my udated plans

https://podcasts.apple.com/au/podcast/stocks-neat/id1601739181?i=1000639779364

podcast link with the CEO of catapault. I thought it was interesting. Will shared some good insights into the video product. It certainly seems an interesting feature and a great cross sell.

Will certainly has steered the ship in the right direction since commencing as CEO. Let’s hope he continues.

disc: I hold a very small parcel IRL.

I have been watching CAT for a while now and is finally getting close to my buy set up so thought I would up date you all. So far it has performed perfectly to my target zones and is behaving to my Fib levels spot on. Today it should reach the upper end of wave (i) on the chart @ $1.25 and the retrace to approximately the 1.03 - 1.07 zone for wave (ii) before starting the next large wave (iii) taking us up to the 1.50 - 1.64 zone of wave (iii). Ill update you all when it reachs the wave (ii) zone on my thoughts then although I will be looking to enter around there with a hard stop just below.

I'm not going to have a chance to look at the latest results from Catapult properly until tomorrow afternoon, but at a glance these results seem very encouraging.

Presentation is here

Top line growth remains very strong, and they have even reported positive free cash flow. Hopefully, that will be the case going forward. There's some good signs operating leverage is being realised too.

The market should like this.. (hopefully!)

Hey Guys,

Wondering if anyone has heard of Catapult publicly addressing the threat of Apple or Google (via Fitbit) ever seriously entering the prosumer wearables market...

So if Google purchased Fitbit, are punters hoping Apple might sniff around Catapult...or perhaps historically that's not Apple's strategy....

Cheers,

Catapult has today given a trading update following the end of their first quarter (their financial year ends in March)

It looks like the company is (finally!) on the cusp of being free cash flow positive. And top line growth remains strong.

They don't usually do quarterly updates, and there's not a lot of detail, but you can read the full announcement here

A very solid result from Catapult. I wont repeat all the key figures (see here for the details), and @jcmleng and others have already provided a great overview. But some key highlights include:

ACV came in pretty much on my expectations at 20.2% YoY growth. H2 was the highest growth in ACV on record.

EBITDA was -US$11m, compared to my estimate of -US$15-20m.

Positive operating cash flow, and by a decent margin, showing a 40% improvement. They remain on track for +'ve FCF in FY24. Based on H2 cash outflows, the first half of FY23 would have been +'ve, as the business has reduced fixed costs by $US3.6m.

Churn at record low of 3.8%

Margins very much moving in the right direction -- variable costs now 56% of revenues compared with 68% in previous H2. Importantly, fixed costs were 47% of revenue (58% pcp) and CAT said "the absolute cost of G&A can now support the business at scale and is expected to rise modestly"

At an inflection point, with every incremental dollar of revenue expected to generate a 30% profit margin.

Video has just <3% penetration among the Pro segment. Lots of cross sell opportunity, and this product set has the highest gross margins (90%).

Existing Pro customers increased the spend by 6.8%

Of course, while companies love to focus on EBITDA, depreciation costs are very real (about $20m per year), and NPAT was -$US30m. Still this is a story of two halves -- NPAT for H2 was -US$8.9m thanks to a US$26m improvement in fixed costs and better gross margins.

Turnaround thesis is on track.

Held.

Very short 14 minute call as the detail of the preso is contained in a pre-recorded video that accompanied the results announcement.

Will reiterated the highlights of the FY23 performance

Then took 3 questions, as that was all that was forthcoming, responses to those questions:

• Wearables growth came from expansion in underperfoming regions - EMEA, US Collegiate, Latin America/APAC
• Confident of sustaining the 25% growth in wearables as (1) only ~2,400 professional teams are customers vs 20,000 professional teams (2) good greenfield growth in FY23, expect to maintain this pace of growth in the next 2-3 years (3) launching of 2 new products in FY23 which opens up new markets
• Vector T7 - opens up basketball which is under penetrated
• Vector Core - lighter version of Elite Wearables designed to help very large organisations support lower tier teams
• Video growth came from 2 areas:
• Legacy Video solution, 7% growth targeted at American Football and Ice Hockey, mostly from upsell and price increase
• SBG Video solution 27% growth, targeted at Soccer, Motosports etc - this is almost Wearable-like growth
• There is a transition plan for NFL from Legacy to SBG Video starting this season, fully transition in the next 1-2 seasons
• Strategy of “Land with Wearables, Upsell with Video” is working very well - there was a 9% growth for customers with 2 products - expecting this to rise to 30-50% (if I heard correctly) as they focus on upselling more video
• FY23 was the year that saw the operating leverage from the SAAS model kick in
• Focus in FY24 is to return to FCF positive - very confident of this occurring as EBITDA has been a good proxy for FCF

Will need to view the management pre-recording to further digest the results, but am liking what I am seeing thus far.

My view remains that the turnaround has already occurred since Will/Hayden rocked up. The FY23 results is the evidence of that turnaround working and in play - game on!

Is this the beginning of “the” turnaround?

On first glance this was significantly better than I think most expected.

From the ASX announcement.

H2 EBITDA OF 2.2m a 15.4m improvement from H1.

H2 gross margins up to 81% from 71%.

Cost to operate the business dropped 11.9m in H2 from H1.

Operating cash flow + 40% YoY to 3.7m.

SaaS revenue +21.8% YoY (CC) contributing to a total revenue of 84.4m.

Record H2 sales: FY23 ACV +20.2% to 76.8m (CC).

ACV churn a record low rates of 3.8%

Performance and Health vertical ACV grew 28% YoY (CC).

Results after market closes today. Strange to reslease this news 10 mins before close.

10 Days away from these guys releasing their full year too.

Holders, keen to get your take on what you think things will look like this year:

How large of a loss?

Where will growth land?

Wondering what the dialogue will be on cashflow positivity.

Quest Asset Partners Pty Ltd just bought some more last week.

I like this company and the story, and love sports so you got to love it, but have been quite turned off by the constant burn and constant story they promote about the insane blue bird potential.

Anyway, keen to get your thoughts lads.

Some quick thoughts following today's meeting with Hayden.

Will & Hayden have been on board for 3 years now, and seem acutely aware of past issues with costs and poor capital allocation integration. They have since transitioned to subscription, have clear ROI hurdles for ongoing investment, and have managed to sustain ongoing strong growth in ACV. The business maintains a solid lead on competitors and has a lot of addressable market to capture.

I've long been bullish on the opportunity, but continually disappointed by the inability of the business to become self-funding. And that remains the elephant in the room -- can they finally transition to cash flow positive and deliver decent margins, all while sustaining good top-line growth.

On that front, Hayden referred a couple of times to a 40% EBITDA margin at scale, with an attainable net margin of 17%. We also spoke to the credit facility they have in place to help them cope with the seasonality of the business, and get them to cash flow positivity in FY24 -- and that they expected to avoid any future cap raise. We'll see i suppose.

If they can, 1.7x ACV seems extremely cheap. Then again, the market has good cause to be skeptical... We've heard all this before from the prior team.

Against better judgement, perhaps, i do cut them some slack. 3 years -- during which we were hit by a global pandemic -- isn't that a long a time to try and turn around a bloated business, while still sustaining customer and sales growth. And with shares again in the 70's it just strikes me as an asymmetric bet.

Still, a few well known Buffett'isms come to mind:

• It's better to own a wonderful business at a fair price, than a fair business at a wonderful price.
• Turn arounds rarely turn.

I feel Catapult has all the ingredients for a great business, but we've yet to see good evidence that it will become one. And I'm mindful of the rationalisation i often use in these situations -- "yeah, it's got a few hairs on it, but it's more than accounted for in the price!"

For my sins, I continue to hold. Even a broken clock is right eventually, right?

Catapult Capital Raise History – Raised Approx. $197.5m since December IPO 2014, today CAT market cap is $178.2m (Closing Price $0.73 Dec 2022).

·      June 2021 – Raises $43.5m, $35m Institutional, $8.5m Retail SSP at $1.90 per share

·      March 2018 – Raises $25m Institutional at $1.10 per share

·      May 2017 – Raises $17m, $14m Institutional, $3m Retail at $2 per share

·      July 2016 – Raises $100m, $91m Institutional and $9m Retail at $3.00 per share

·      Dec 2014 - IPO Raises $12m

Catapult Acquisitions

·      June 2021 – SBG Sports Software $40- $45m comprising of $20m in cash, $20m in deferred CAT shares, up to $5m in CAT share subject to achievement of agreed key performance indicators.

https://www.asx.com.au/asxpdf/20210623/pdf/44xlwvwk4015zc.pdf

·      November 2020 – Science for Sport – No amount stated, profitable subscription online sport learning platform.

https://www.asx.com.au/asxpdf/20201124/pdf/44q60ghvmkfbwg.pdf

·      August 2017 – SportsMed Elite and Baseline athlete management system (AMS) products and clients, and recruits key personnel from SMG Technologies Pty Ltd (SMG) for $1.9m.

https://www.asx.com.au/asxpdf/20170807/pdf/43l6llnpjcjqg6.pdf

·      July 2016 – PLAYERTREK (Kodaplay Ltd) - €3.3m (A$4.9m), with €2.4m (A$3.6m) payable in cash €0.9m (A$1.3m) payable in scrip consideration. – leading developer of wearable analytics software solutions for the prosumer market.

https://www.asx.com.au/asxpdf/20160713/pdf/438jn9zw2q7p45.pdf

·      July 2016 – XOS Technologies – US$60m (A$80.1m) – a market leader in providing innovative digital and video analytics software solutions to elite sports teams in the US.

https://www.asx.com.au/asxpdf/20160713/pdf/438jn9zw2q7p45.pdf

Leadership Changes

·      May 2021 – New Chief Technology Officer, Param Hegde

https://www.asx.com.au/asxpdf/20210511/pdf/44wd52cs2b15l3.pdf

·      30 October 2019 – Mr Will Lopes appointed as CEO commencing 11^th November 2019. Mr Lopes former Chief Revenue Officer of Amazon subsidiary Audible.

https://www.asx.com.au/asxpdf/20191030/pdf/44b16jkj4jwyn2.pdf

·      7 February 2019 – CEO Joe Powell resigns.

https://www.asx.com.au/asxpdf/20190207/pdf/442fq1tl5lhp3f.pdf

·      19 Dec 2018 – Co-found, Current CTO Igor Van De Griendt steps down from CTO role 

https://www.asx.com.au/asxpdf/20181219/pdf/441cpnhr0ftsqj.pdf

·      1 May 2017 Joe Powell – Shaun Holthouse steps down from CEO and moves Global Head of strategy

https://www.asx.com.au/asxpdf/20170407/pdf/43hcff1mc20nb4.pdf

·      Founded by Shaun Holthouse and Igor van de Griendt in 2006. Listing late 2014 with Shaun as CEO.

Insider Ownerships (Net worth based on closing price $0.73) and Percentage of total CAT shares owned

Founders                                                         

Igor Van De Griendt (Charlajo Pty Ltd)           20,508,000 Shares ($14.97m)            8.4%

Shaun Holthouse (Manton Robin Pty Ltd)      17,675,000 Share ($12.9m)                7.3%

Adir Shiffman (Long term                               6,042,100 Shares ($4.41m)                2.5%

Current CEO Will Lopes                                  225,731 Shares ($0.164m)                 0.09%

Previous Shareholder 5 years ago. Currently do not hold or plan to hold CAT shares.  

Well, there's your answer @jayjayjayjay -- looks like some in the market were able to anticipate Catapult's results. Must be nice to have psychic powers! (or somehow benefit from a bit of "leakage".. disgraceful stuff)

Aaaaanyway..

It was a strong result; a record A$59.6m in revenue for the first half, up 11%.

89% of total revenue is now on a subscription basis.

ACV was up 21% on a constant currency basis to US$70m. That's the 3rd consecutive half of 20%+ growth in ACV. Strong.

Great to see ACV also growing on a per customer basis; it was up 18% in the Pro Segment. And the cross-sell initiative is working well, up 33% since September last year.

I'm just repeating the key points made in the announcement at this point -- but it is worth highlighting the 'resizing' which should see them back at positive free cash flow in FY24 (that's within 16 months from now given the March end financial year). They expect to save US$12m per year on this initiative.

Combined with a new funding facility, the company stressed that another capital raise would be avoided. Although, to be honest, I was already hoping that would be the case, but looking at the cash flow statement it looks like it would've been a closer call than i was expecting. It seems the accelerated investment in growth initiatives was more 'accelerated' than I had expected.

At the end of the latest half they have US$15m in cash and although Operating cash flow was slightly positive, a lot of cash costs are marked as investing cash flows due to the capitalisation of equipment etc, so FCF was negative US$13m. And, as @AUROPAL rightly pointed out, that's a big deterioration on the -$US2.9m in FCF in the pcp.

You can watch a management briefing here (I haven't watched yet, but will catch up on it later tonight)

Doubling this half you have a business on a P/S of 1.7 or so. One with a high degree of recurring, high gross margin revenue, and that's been growing ACV at an aggressive rate -- a pace management think they can sustain.

If they can indeed deliver sustainable FCF as they suggest, i'd expect a significant rerate. Let's see...

[held]

Is CAT a beneficiary of WSP Ann yesterday where they released a statement re trimming the fat that results in a profit, price shot up 30%.

given the low multiple CAT trades on and recent Ann of staff cuts I wonder if market thinks they have a similar outlook. CAT up 11% on no news that I can see.

disc: own a tiny parcel IRL

Hi totally hear you @PeregrineCapital

Part of the problem here has been a lot of moving of the goal posts. First it was talk of EBITDA positive, then operating cash flow positive, and now Free cash flow positive.

I mean, great, all are worthy aspirations. And I do think FCF is a better metric to focus on, especially as operating cash flow can be made to look a lot better by marking some expenditure as investing cash flows. It's certainly much better than EBITDA.

But it's understandable that investors could look at this latest announcement with some cynicism.

To be fair, covid threw a bit of a spanner in the works. And I'll also allow for the fact that it would take some time to unwind previous management's largesse (although covid would have been the perfect cover). And it's not always a bad thing to spend heavily when there's a sound strategic rational.

But to my mind if there was any fat to trim -- especially that which wouldn't impact growth, which is what they are claiming -- then why wasn't this made a priority before!? Cost management is something that should always be in focus.

Moreover, they added costs in the recent year as part of an accelerated investment in sales, product and operations. Are we to surmise that these are the same costs that are now being unwound? Or was there just loads of additional expense elsewhere?

The announcement was also a little vague in exactly what expenses and in what areas would be cut, but I assume its prosumer mainly.

Also, reading between the lines, what is it they are seeing on the business' front lines that has prompted this focus on costs? Macro conditions were mentioned, but again that's pretty vague.

Anyway, the market has welcomed the news, and I'm not going to argue against the intent. If they can sustain 20% ACV growth and pivot to FCF +'ve I dare say we'll see a re-rate. But let's see how it goes.

I maintain my position because, despite some hairs, I just think shares are cheap. (they are on something like 2x ACV)

ASX announcement here

Catapult has launched GameTracker for Ice Hockey -- which integrates all the various datasets it captures (through wearables and video). This comes only a month or so after they released this functionality for BasketBall. Amercian football is the next area this will be applied to.

These upgrades all stem from the acquisition SBG, whose tech is being rapidly incorporated into the full product stack. The idea is that this should strengthen the offering (no one else is offering this functionality yet, from what i can tell) and make the cross/up-sell more compelling (and there's a lot of potential here in my opinion).

The Hockey business is up 7x over the last 5 years -- admittedly off a low base. Although ACV from their Vector product in Hockey has doubled in the last year. It shows the broad applicability of these solutions across different sports, and given the current penetration there's still a long growth run way.

The ASX announcement can be found here

Am increasingly impressed with the new CEO. We spoke with the Chairman last December (see meetings page), but I'll see if we can line up a chat with Will Lopes.

Some good coverage has been given to CAT recently so I won't delve into any of the numbers. There was a clear expectation from shareholders that some FCF would start to come through. Management went in completely the opposite direction and spent large on growing ACV.

I'm willing to accept that management knows what's best in the long run. What I couldn't accept is a capital raising to fund an acquisition after having pursued the strategy of growing ACV at all costs. This would be the ultimate deal breaker for me.

Management need to prove this can continue to grow revenue >20% and stop haemorrhaging cash whilst they do it.

Shares now down 25% in the 4 trading sessions since FY22 results were released. As I said at the time, there was a few factors that weren't great, but c'mon -- that's pretty harsh! Talk about an unforgiving market.

If you want a little more "colour" on the released results preso, CEO Will Lopes and CFO Hayden Stockdale talk through them here:

https://www.youtube.com/watch?v=pSePDHiyyVE

Worth watching just to see how management are pitching the story.

While it's easy (OK, very easy) to be a little jaded, there is still a pretty good story here...i think.

It is worth remembering that Will has only been on board for 2 years -- he inherited a bloated company with a poorly coordinated product set, flailing strategy and was just about to bear the full brunt of a pandemic which shut down sporting events around the globe.

They just delivered 32% ACV growth and are expecting 20-25% growth in the current year. And with most revenue now subscription based (a key goal of Wills when he took over), that ACV growth should largely translate to revenue growth. They still have <10% market penetration and are the current industry leader with deals across the biggest teams and leagues in the world (and a big x-sell potential there too, especially with a fully fledged T&C offering that has demonstrated strong growth already in ANZ). The goal of US$400m in ACV was again reiterated, which is 6-7x greater than present.

OK, costs did blow out, and you don't want to ignore that, especially given the company's history of poor cost control, but there are some genuine one-offs and non-cash items there due to the SBG acquisition, the balance sheet is very strong (US$26m), they expect to be operating CF/EBITDA positive going forward, and all growth investment is conforming to the rule of 40.

The hint of weaker margins due to higher wages, COGS and supply chain issues is probably a factor for the market too, although this isn't an issue specific to Catapult. It was good to see gross profit and contribution profit grow faster than revenue. So at least on that front some scale advantages are emerging.

So, it's not like this has no hairs on it. Still, in AUD terms, the business is sitting at around $90m of confirmed revenue for the current year. Again, that's on track to grow 20-25% in FY23, and grow to over AUD$550m worth in the coming years. Importantly, and again you need to take management at their word here, the business is self funded to achieve these goals.

On a fully diluted basis, the market says this company is worth less than $210m.

For my sins, I think the market is wrong. I'm continuing to hold.

Have been busy for most of the day, but when I skimmed Catapult's results this morning my first instinct was "the market should like this".

But, with shares ending down 10%, it seems I was way off base!

So let's dig in and see why that might be.

Of course, the company was keen to put its best foot forward. And it did have some genuine positives to report.

• The transition to a subscription model is largely complete, with subscriptions now 92% of total revenues (and 98% for the Professional Performance & Health segment)
• ACV grew 32% (double FY20) and was 51% higher in the all important Americas market.
• Average Annualised Contract Value (ACV) per customer was up 4.2%
• Customers that contribute to ACV were up 16.3%
• P&H churn remained low at 3.5%
• MatchTracker and Vector integration ahead of schedule, with Tactics and Coaching growth of 29.7% in APC during the key selling season.
• Customers with more than one solution grew 27%, showing good success with cross selling, and they expect this to accelerate with the integration of MatchTracker and Vector
• Positive operating cash flow (just, and with some caveats)
• US$26m in cash on balance sheet and growth spend fully funded.
• Strong prosumer ACV growth (but off a very small base)

Aside: The transition to SaaS always has a bit of a drag on revenue, as revenue that was previous booked upfront is now recognised over a much longer period. The advantage is that it provides for smoother and more consistent cash flow and revenue, and (ideally) makes for an easier purchase decision by the customer as it's a smaller ongoing cost, rather than a large one off cost. It transitions expenditure from Capex to Opex. Now that this transition is behind them, growth in revenue should more closely match growth in ACV.

The best part of Catapult has (to my mind) always been the Pro P&H segment, and here we saw 32% ACV growth and they have still only captured <10% of the available market opportunity. I've said it before, but i wish they had remained focused purely on this instead of trying to expand into too many other areas, too quickly.

At any rate, they did what they did, and while that has seen higher costs and investment spend, they do have (finally, i hope) a market ready product in Tactics & Coaching (T&C) and a solid P&H customer base from which to cross-sell from.

Indeed, the T&C segment has a large addressable market for which they have only captured less than 2.5%. The customer spend here is higher than for P&H and enjoys 90% gross margins and even lower churn (1.5%). The APAC region was the only market in which the newly integrated product was able to be sold (due to the different sales cycles in different geographies), and here T&C ACV was almost 30% higher, compared to just 7.2% and 3% in the Americas and EMEA, respectively. It bodes well for future growth when they start to present this to the northern hemisphere markets.

The company is targeting long-term ACV of >US$400m, compared to US$63.9 at present.

If we just take expanded penetration of P&H, T&C and increased customer spend, that takes us to just shy of US$300m. The rest is inorganic (acquisitions) and prosumer -- and i'm not really keen to put much weight on that. Still, it's a decent uplift if it can be achieved.

Ok, so all of that seems pretty good. Catapult is now a more pure play subscription business with a fully fledged market ready product set and very strong ACV growth with a very large market opportunity still ahead -- and they remain the largest player in this space.

And you get exposure to all of this for 2.6x ACV or 2.2x revenue. That just doesn't seem demanding at all -- especially with the company guiding for FY23 ACV growth of 20-25%. AND, management said they were fully funded to achieve growth ambitions (ie. no more capital raises)

So, what's the market worried about?

Well, mainly, the company is still not profitable. When they hell are we going to see some scale advantages start to emerge? Surely not for a while if they keep increasing the expenses -- in fact, we saw cost increases across sales, product and operations. I'm all for spending money with a good ROI, but c'mon guys! I think we've been patient, but when are we going to see the results? Show me the money!!

The NPAT was negative US$32m

EBITDA negative US$5.8m, even on an underlying basis

Positive operating cash seems largely a result of shifting a lot of expense to the investing section (capitalised development COGS costs). Free Cash Flow was negative US$17.9m

I do think the new CEO is far more targeted in the investment spend, but I was hoping to see even more restraint. Especially in this new market environment which is far less tolerant of cash burning operations.

So i do get the market's reaction now that I've had a chance to dig into the details. But, call me an optimists, the potential here remains very attractive:

Catapult is a market leader in a large and resilient industry undergoing structural change (digitisation). There is genuine sales traction, and that's growing at very strong rates. The revenue is very sticky and with attractive gross margins. It is also, apparently, well funded and on track to achieve its ambitions without the further help of shareholders.

Sadly, until they achieve sustainable free cash flow, while still maintaining growth, the market is likely to remain sceptical. And fair enough.

If it wasn't for the very solid ACV growth, and expectations for that to continue, I'd be out of here. But, for better or worse, i'm prepared to stay put for now. I think it's called the endowment effect...

Yes the paper was more concerned with what is done with the data and who has access to it which, is a valid point. Most organisations should have systems in place to effectively monitor this access.

Anyone involved in high performance sport will tell you that the data is only as valuable as the knowledge and understanding of those using and interpreting it.

As someone with 20yr+ in high performance sport I can tell you that tracking load, progressive loading, effective periodisation and adequate recovery and regeneration protocols are essential for long term athlete development and performance maximisation.

The ability to collect, collate, monitor, interpret and individualise relevant and essential performance data has enabled the progression of individuals, individuals within a certain position and individuals in particular events. 

Consequently, the guess work has been eliminated you know have the ability to make evidenced based decisions allowing you to see what work someone has done from their first year to their last year. Consequently, loadings can be adjusted based on training age, position requirements, the event/games demands and the particular importance of the game, event or particular point of a competitive season. 

Of course there is a point where too much data can cause paralysis by analysis but that’s the responsibility of the high performance coordinator to decide in tandem with other support staff and the coaching unit what is important and what’s just noise. 

Heard a report on ABC AM this morning about the data collected from athletes, and the concerns over privacy of player data (eg how it could be used by betting agencies).

https://www.abc.net.au/radio/programs/am/first-time-voters-weigh-election-choice/13830338 (start at 16:07)

What caught my ear, however, was the claim that this data doesn't actually deliver on its claims to "reduce injury and improve performance"

I managed to track down the discussion paper referenced in the story, which can be found here. It's a long read, and the focus is really on the privacy angle. It doesn't elaborate too much on the effectiveness of this data -- and where it does it seems to be on specific metrics.

I don't see this as a thesis buster, and my thinking is that at the elite level clubs will go for anything even if there's a small chance of providing an edge. But I wanted to share in case others have a different perspective.

Catapult today announced it had signed the German Football Association (DFB-Akadamie) as a new customer, with a multi-year, multi-solution contract.

It covers all 15 teams across womens and mens national teams for the video solution, and for 10 teams with the wearable product.

No financials given, and the announcement wasn't marked as price sensitive, so likely not material in and of itself. But hopefully acts as a useful reference customer given the German FA is one of the more significant sports federations globally.

ASX announcement here

Catapult has announced its entry into the eSports market with a partnership with NASDAQ listed Motorsports games (NASDAQ:MSGM). (see here)

There's no doubt that eSports is an exciting space, and Catapult was keen to emphasise the size and growth of the sector. And given the data they collect, it makes perfect sense for them to move into this domain.

But..

There were no details on the nature of the multi-year subscription agreement (although we can assume it's not material in and of itself, as it wasn't marked as a market sensitive announcement).

Moreover, I'm not sure Motorsports Games is that impressive a customer. Their latest instalment of their Nascar series looks to have bombed:

Reading through the reviews, it's pretty brutal stuff.

That being said, NASCAR 4 & 5 have much better reviews, and it's also probably fair to say that these titles are more aimed at the very serious end of the market, and not casual gamers (you need a steering controller to play these games).

Looking at MSGM's track record, shares are down ~70% since listing and the latest quarterly result isn't great (although they claim this is due to the timing for some of their releases). In the last 9 months, they made US$120k from eSports segment, down from US$290 in the previous corresponding 9 month period. Again, there are timing factors at play in relation to when events were held, but they are clearly a very small player in this space.

I'll be keen to ask management more about this at our upcoming December meeting.

Anyway, like I said, this is a logical area to move into and a great way to gain extra value from the data they collect. I'd just like to better understand the nature of these deals, what development and operational costs are needed to support this foray, and whether or not they are partnering with organisations that have any strong presence in the eSports market.

Catapult has signed a multi-year deal with Roush Fenway Racing to use its recently acquired Racewatch solution.

No financials given, and in and of itself the deal is likely not likely material in the overall scheme of things -- but it's an encourage first step into a large and (hopefully lucrative) new vertical.

Roush Fenway Racing is a major player in NASCAR and should serve as a potent reference client for future sales.

Doesn't change the thesis for me, but good to see some movements on this front after their acquisition of SBG Sports a few months back.

Shake 'n Bake ;)

Catapult has seen a 43% jump in Annualised Contract Value (ACV) from a year ago, with churn dropping back to a near record low of 4.1%. That's a US$17.6m increase over the last 12m to US$58.8m (about $79m AUD).

Part of this was due to the recent SBG acquisition, but excluding this the business still saw a very healthy 30% boost in ACV, largely from its Performance & Health segment.

Importantly, multi-solution customers grew 49% year on year -- and i think there's a lot of opportunity remaining here. Also good to see the balance sheet in a strong position with the company having US$42m in cash at the bank (that's about 10% of the company's market cap).

We'll get the full first half results on November 17, and the company is holding an investor day on Nov 9 (you can pre-register here)

With shares on ~5.5x ACV, and given the accelerating pace of growth, i still see shares as good value. 

ASX announcement here

Catapult has signed a new multi-year deal with the NBL's Brisbane Bullets.

In and of itself it's not material, but noteworthy in that this is the first time the group's new Focus and Hub video products (derived from the SBG acquisition) have been provided to a Basketball team, the 5th sport the tech has now been applied to.

Also, it comes 3 months after the acquisition of SBG and a year ahead of management expectations.

Each new sporting verticle significantly broadens the market opportunity, and Basketball is a big market. The new offering also gives new entry points for Catapult to secure deals and then upsell additional solutions.

Good news, but will be good to see some bigger, more prominant customers take up the solution.

Just when you thought there'd be no more capital raisings...

Catapult is looking to raise about $40 million to fund the acquisition of SBG Sports Software -- a London based company that was originally focused on Formula 1 racing, but has since branched into other sports such as soccer and rugby. Their software aggregates multiple sources of video, audio, and telemetry data, and then displays that on a dashboard for analysis.

Catapult will spend $40-45m on the acquisition; $20m in cash, $20m in shares at a $2.15 issue price (granted in instalements over a 12 month period from the first anniversary of the acqusition), and there will also be a $5m earn out if various KPIs are met by FY23 & FY24.

The capital raise comprises a $35m underwritten institutional placement at $1.90 (a 13% discount to the last traded price), as well as a $5m non-undewrwritten share purchase plan for existing shareholders. Two of the directors will also subscribe for $1.35m worth of shares under the same terms.

It's a fairly sizeable transaction, representing about 10% of the current market cap of Catapult. The rationale is that it will bring forward their development of video capabilities by around 2 years, expands the total addressable market (most notably with motorsports), adds 20 new marquee clients from the top 100 soccer and rugby teams (including Manchester city and Tottenham Hotspur), and should boost Annualised Contract value by 28% in FY21.

Funds raised will also be used to accelerate R&D and sales capabilities. So the cost base will again rise further, potentially as much as $25m in the coming years.

There's a briefing at 10:30am Sydney time today, and you can register here if you want to attend.

My initial thoughts are that the company is again at risk of expanding beyond its highly profitable core -- something that hasnt (so far) delivered much value. Especially given the added costs.

Then again, the new CEO Will Lopes seems to be quite savvy and has managed to re-focus the business in recent times. The global market for elite sports analytics is massive and fast growing, and this acquisition has the potential to entrench Catapult as the clear global leader, with a significantly enhanced offering. It also gets rid of an up and coming competitor.

It all depends on how well the acquisition is integrated and what growth it manages to unlock. I'll see what they say in the briefing.

You can read more here

Catapult looks to have finally turned a corner, despite the disruption of covid.

Others have outlined the metrics, and you can dig into more detail in the company's presentation. But for me the standouts include:

- Strong ACV growth, with good potential in the US market

- 16.7% Increase in multi-solution customers (there's a good way to run here)

- Improved margins and ongoing cost discipline

- Second consecutive year of positive free cash flow

- Strong balance sheet

- Continuing success in transition to (higher margin) subscription model

- Prosumer holding up despite pullback in marketing

- Growth in the final quarter is a strong leading indicator post covid

As capital sales effects continue to tail off, I think the company can return to attractive top-line growth -- likely 15-20% in the medium term. For a business on the cusp of profitability, no longer burning cash, with the potential to reap attractive scale benefits, a market leading position and a long growth runway, the current price to sales of 4.6 seems cheap in the context to other SaaS oriented businesses.

It's been a wild ride, but continue to hold and see value.

The announcement of a new independent director isn't usually a factor for me, but Catapult's latest appointment seems noteworthy.

Tom Bogan (linkedIn profile here) will join Catapult's board from tomorrow. He's got an impressive CV, acting as the current vice-Chairman of Workday, former CEO of Adaptive Insights and former partner at Greylock. All of these are huge success stories in the US.

Given Catapult's North American focus and opportunity, it's great to be able to tap into that experience and no doubt a valuable network. In fact, he's heading up a new SaaS Scaling Committee specifically created for this purpose.

I don't want to oversell it -- i'm not changing my valuation or anything -- but I do think this is quite encouraging. Someone like that virtually has their pick of board spots, so to pick a relatively tiny Aussie company suggests he sees big potential (Workday does 40x CAT's revenues).

If Catapult can continue to show cost restraint and a rebound from the covid-induced slump, I suspect it will be due for a re-rate by the market.

FY21 will be a rather ordinary year given the weak first half and the lingering covid situation in the US, but i'll be pleased so long as there's some good indications the sales trajectory is returning to a 15-20% range. If not, it'll prompt a rethink.

ASX announcement here

Catapult's half year results for FY21 were hit pretty hard by the covid-induced slowdown in proffessional sports.

Revenue was off 8%, as teams slashed budgets, but also as the business continued to switch away from capital sales.

Net profit took a big hit dropping 39% due the operating leverage of the business and an increase in corporate overheads (it was flat on an "underlying" basis)

Catapult has really failed to deliver the kind of results the faithful (like me) have hoped for -- at least so far.

Inspite of this, there are still a few reasons to remain hopeful.

Covid was a genuine and massive hit to the industry, particularly in their largest segment (USA). Although that impacted the business, churn was reduced over the period (4.5%, a record level), and ACV grew 8%.

In fact, there was 14% subscription growth in the key 'Performance & Health' segment. 78% of revenue is now recurring in nature, and there was a 19% increase in the number of clients using 2 or more solutions. 

Importantly, the business delivered $8.8m in free cash flow, and has over $24m in cash. It remains very well funded.

I think the business showed itself to be rather resilient given the trading environment.

As sports return to normal, it seems likely that Catapult will remain sustainably cash generative, and soon start to post statutory profit. I remain convinced that the business will be bigger and better in 5 years.

Estimating growth is the hard part, but will update my thoughts in my valuation.

But if the business can return to top line growth of 10-15%pa in the next few years, and if it can transition to profitability, then i think it could get a meaningful re-rate by the market.

If it falls short, shares could easily drop lower in the coming years, but my view is that the downside is less than the upside, given the low multiple CAT currently trades at. ie. the market is not pricing in much growth anyway.

disc: held

Catapult announced two new partnerships today; one with PUSH (tech for gym training sessions) and Pro Quick Draw (an online playbook for American football coaches).

The exact nature of the partnerships wasn't disclosed, although it looks as though at the very least it should offer some new sales channels. It seems likely that Catapult would also earn a commission on any partner product sales.

More importantly, to my mind, it helps strengthen the customer value proposition, which should be useful for retention, sales and the network effect over time. Especially as these partnerships lead to better integration of these products.

This is not a material announcement in regard to near term financials, and my valuation remains unchanged.

Some of the legacy issues with Catapult seem still weigh on investor sentiment, but I feel the new team is making all the right moves.

Relative to other tech stocks, Catapult is trading on a very undemanding valuation at 3.6x sales. (eg NEA is also a business that has variable costs -- not near 100% gross margins like a pure-play software company -- and is also growing at similar rates, has a P/S of ~10x)

It's free cash flow positive, well capitalised and growing its ARR at 17%pa over recent years. It still has a long way to run and I think also some latent pricing power. It's the dominant player in a large and fast growing industry, where network effects play an important role.

disc: held

CATAPULT LICENSING RENEWS AGREEMENT WITH NFL PRODUCTIONS AND BLEACHER REPORT, TO SUPPORT BRANDS LIKE SAMSUNG, GUINNESS, NISSAN, AND ADIDAS

Catapult Group International Limited (ASX:CAT, ‘Catapult’ or the ‘Group’) is pleased to update the market on the progress of its Media & Engagement vertical, with Catapult Licensing renewing and signing several high-profile agreements in FY21.

Here are my rough thoughts after the FY20 Catapult results presentation in August 2020:

• Really impressed with Will Lopes (new CEO), taken control of the business, strategy – focused on customer obsession and developing a comprehensive platform of integrated solutions for elite sporting teams and athletes. Love the customer focus.
• Also focused on generating long term positive FCF as the main metric for shareholders.
• Lopes obviously has extensive experience with these subscription business models (previously he was in charge of scaling Audible, an Amazon subsidiary), as he has introduced a number of new financial SaaS metrics (ACV, Lifetime Duration, ACV churn, Contribution Margin)
• Hayden was a bit stiff, but not a bad thing for CFO. Obviously excited about the future of the business and these new SaaS metrics.

Catapult’s management have recently refreshed the business strategy, emphasising long term results and the ultimate goal of generating long term free cash flows. At a high level, their strategy is focused on 3 key ingredients:

• Customer obsession, with solutions focused on the customer;
• Capital investment with a long-term focus; and
• Prudent, deeply analytical decision making.

Management are aiming to move away from a product-based strategy towards a customer solutions based strategy. Elite sporting organisations seek technology solutions across a variety of problems, and although Catapult is a leader in some categories (i.e. management, performance and health, and tactics and coaching), there are numerous other services and features sought by these organisations that Catapult can provide (e.g. professional services, media and engagement). It wants to develop the most comprehensive suite of solutions in the market that provide deeper and more meaningful value to athletes and teams. Catapult is focused on its professional customer segment, rather than the prosumer category.

More specifically, management have identified the following focus areas:

• Platform expansion – drive greater value for customers, measured by ARR growth
• Subscription focus – move core business model towards SaaS, build sustainable revenues. Service oriented businesses are successful through building customer relationships. Measured by % of revenue that is recurring.
• Efficient cost structure – must be a sustainable business model. Seek to improve variable and non-variable costs. Design multi-year roadmap, execute on key metrics. This focus creates long term FCF. Measured by opex as % of revenue.

Catapult is a global sports technology business that is building the platform of solutions for elite teams and athletes. Currently, Catapult’s platform includes wearable tracking solutions, video and analytics. Catapult, headquartered in Melbourne, Australia, works with ~3,000 teams in 137 countries around the world and across 39 different sports. Catapult has approximately 340 employees and a market capitalisation of approximately $320m (August 2020).

Catapult operates via 3 segments:

• Wearables (e.g. Vector, ClearSky) – wearable hardware devices (i.e. vests) with a GPS, accelerator etc. that provide athletes and their sporting organisations with detailed, real-time data and analytics to monitor and measure their fitness, risk of injury etc.
• Video Analytics (e.g. Vision, PlayerTek) – digital video coaching and analytics solutions, video platform for coaches to edit, share and communicate highlights.
• Other / New Products – athlete management platform that collect, store and communicate athlete information.

Catapult’s customers are predominantly elite professional sports teams, including various NBA teams (e.g. Golden State Warriors), NFL teams (e.g. Dallas Cowboys), soccer teams (e.g. Real Madrid) and universities (e.g. University of Notre Dame). Catapult has also signed league-wide deals with certain sporting leagues or bodies such as the AFL, NBL and Cricket Australia. The company also provides solutions to semi-professional athletes under its ‘prosumer’ division.

As athlete health and wellbeing is becoming a priority for elite sporting teams, Catapult helps these teams monitor, track and provide feedback in real time to athletes and coaches.

Catapult’s purpose is to build and improve the performance of athletes and teams.

Catapult’s largest markets are Australia, Europe and North America – with the US becoming the predominant business over the last 18 months.

• Catapult provides best-in-class solutions to elite athletes, with a loyal customer base that includes the most elite sporting organisations in the world.
• Highly scalable, SaaS business with high margins, sticky recurring revenues and multiple growth avenues within a growing sports technology market.
• Catapult’s new management team has refreshed the overall corporate strategy, focusing on customer obsession and profitable growth, and has already guided Catapult past a number of important milestones including positive free cash flow.

Catapult has been appointed the preferred tech supplier for the French National Rugby Leagure (LNR) team.

The extensive tender process began in 2019 and began with a view to optimise performance ahead of the 2023 World Cup.

No financials were provided, and the announcement was not marked as market sensitive, so this is not a material deal in and of itself.

However, it is encouraging to see Catapult win this deal after such a lengthy and detailed tender process, and that it involves the full suite of technology.

Announcement here. 

[Disc. held]

Hopefully, that screenshot (as described in the forum posts and replies) works - when you click on the "View Attachment" button below.

This was a really good result for Catapult. It gives me further encouragement that the business has indeed (finally) turned a corner, and that the new CEO is on the right path.

• Subscription revenue up 21%
• EBITDA up 225% (from $4.1m to $13.3m, and ahead of expectations for $11.5-12.5m)
• Free cash flow positive, $9 million
• 39% growth in multi-solution customer numbers
• Cash on hand of $39.8m (as of 14 August)

Capital sales were down 27% as the peak US sales season was impacted by covid, and as the grouop continues to shift customers to a subscription model. As a result, Revenue was only 6% higher. The company expects a good deal of sales that were deferred in Q4 to be recorded in the current first quarter.

Also, applying D&A, the company still reported a statutory loss of $7.7m.

Looking ahead, the company expects to increase R&D and also some cost reductions acheived in response to COVID will be wound back. The business still expects to generate free cash flow in the current year.

(note, they are moving to a March year end and will report future results in USD to reflect their geographic exposure and better align with sales cycles).

There's a bit of detail to explore, read the results presentation here.

Catapult has been awarded its largest ever capital deal, providing 16 sports acadamies and teams under Hungray's BKMS Sports with video and wearables services. 

The announcement was not marked as market sensitive, and no financial details were provided, so it's unlikely this deal will be material in and of itself. Though it is encouraging that the company has secured a record contract win in the current environment.

ASX announcement here

A small but noteworthy thing: Catapult is changing its financial year end to 31 March and results will be presented in USD.

The main reason is because the current June 30 year end conflicts with the peak Norther Hemisphere selling season, which runs May to August and accounts for 85% of sales. Also, 70% of earnings are in US dollars.

The FY21 will therefore run for only 9 months.

Makes sense to me.

ASX announcement here

Catapult is expecting the following for  FY2020:

Total revenue between $100-$101 million, up 5.3% from $95.4m in FY19.

EBITDA of $11.5-12.5m, up 192% from $4.1m last year.

$9m in free cash for FY2020; a big turnaround from the $24m loss last year and achieving a positive result a year earlier than expected.

Cash balance is $27.5m.

CEO Will Lopez said the professional sports landscape had improved since the last update on March 27, and that the business had continued to win new deals and retain customers during the lockdowns. However, this disruption has delayed things and many of the sales that would have been made in the last quarter are now expected to be delivered in the FY21 year.

With cost reductions already in focus, it seems covid allowed the business to cut costs faster and deeper than originally planned. There was always a nicely profitable business inside of catapult, so it's great to see that being unearthed (seemingly) without much of an impact on sales growth.

Speaking of which, 5%-odd top line growth would normally be a very disappointing result, but in the context of a raging pandemic -- one that had a direct and significant financial impact on its customers -- it could have been a lot worse.

As you can see in the chart below, sales are always much stronger on the second half (with sales typically dropping a bit from one year's second half, to the following year's first half). In this instance H2, sales were the same as H1 and down 5% from H2 2019. Normalising FY20 second half result using the H2 19's growth, sales would have come in 12% higher at $112m.

Given things will be tough for the foreseeable future, I'd be happy enough if they could score 10% sales growth for FY21, before returning to 15-20% odd growth (on average) over the coming 5-6 years.

Based on last close of $1.27, shares are trading at an EV/EBITDA ratio of 18. Assuming they can recover to near pre-covid sales growth in the coming years, and maintain cost discipline, that seems very undemanding.

Full results will be out late August.

Read ful announcement here

Catapult announced that it is unwinding its costs savings measures (reduced salaries and furlough leave) as the impact of the coronavirus has been less than expected.

This announcement was not marked as market sensitive, and no specifics were provided, but I take it as a positive that the company feels such mitigation is no longer necessary (especially with so much business in North America).

I'm not reading into this too much, but felt it was noteworthy.

See here

Catapult has provided an update relating to the impact Coronavirus is having on its business.

Catapult reiterated its strong cash position, which combined with a recent drawdown of $5m in debt from its existing facilities, gives it ~$30m in cash.

It is working to manage costs and manage working capital (although, no mangement or directors have taken a pay cut -- unlike other pre-profit companies. Seems like that would be the classy thing to do).

The company is "comfortable" its ability to reach cash flow positive has not been materially impacted, and has reiterated guidance for that milestone to be reached by FY21.

Customers continue to use and purchase their products, but purchasing decisions are likely to be deferred, and that Q4 new sales growth is likely to be negatively impacted.

75% of revenues are are based on long-term subscription payments.

The business will benefit from a weakening Aussie dollar. (looking seperately at the FY19 annual report, a 10% fall in the AUD would have boosted profit by ~$3.5m)

CEO Will Lopes said that the group is well placed to navigate the crisis and the strong cash position will strengthen their competive position long-term.

Full announcement here  

Catapult shares are down 65% since the start of the bear market -- around double that of the wider market. 

I think the business will struggle to make ANY sales for the rest of the year, and will be a slow pick up after that. The various leagues they service are all winding back, some entirely. In many cases, player pay is under review.

Catapult's customers are more sensitive to the impacts of this virus than I had first imagined. Initially, my expectation was that elite sports would continue, just without crowds and for broadcast only. But with entire seasons being suspended, this was a flawed assumption. 

The business was EBITDA and FCF positive in the latest half, and was on track for its first full year of positive cash flow, but they could linger in the red a while longer with this big halt to new sales.

That being said, the company has $25m in cash and no debt. That should keep them afloat until some form of normalcy returns for their customers. They also had $68m in recurring revenue, and though churn will almost certainly rise, it gives some comfort that there will be a base of operational cash flows coming in.

After Catapults first half results, i was assuming it could get $112m in revenues this year. That now looks unlikely.

If we assume that professional sport will be up and running again in another year or so, but allow for a big dip in sales and a slower growth rate from a lower base, we could say (for the sake of argument) that Catapult only reaches $112m in revenue and profitability in 3 years time. If we give the company a P/S of only 2, we get a target price of $1.14, which is 75c (the current market price) if we discount back at an aggressive 15% per annum.

In other words, assuming catapult can endure a large but ultimately temporary drop in new sales, you can sketch out a case for value using very low-ball assumptions. 

But maybe those assumptions, as unambitious as they may seem, are not reasonable?

I'll continue to watch closely

A good result for the 6 months ending Dec 31, 2019.

Revenue grew 18% to 50.7m, while the net loss essentially halved to -$4.8m.

Catapult recorded a positive EBITDA of $5.7m compared to a loss of -$1.4m in the prior first half. (They did get a bit of a boost from the adoption of AASB16. On a like for like basis, EBITDA came in at $4.7m)

Importantly, Catapult saw positive free cash flow of $13.6m, which has boosted cash to $24.7m. There's some seasonality here, but the company reaffirmed its expectations to sustainably generate positive FCF by FY21, and it seems unlikely it will need to raise cash again. 

Cross-sell initiatives seem to be doing well, with the number of customers with more than one Catapult product rising 66%. Overall customer numbers grew 19%.

The major North American segment saw growth of 21% in revenue -- it now represents 70% of the total. EMEA grew 15.5% and APAC grew 10%.

ARR grew 20% to $68.8m. 

Perhaps best of all, operating costs declined by 4%. (poor cost discipline in prior periods under previous mamangement was always a big concern).

Churn decreased from 5.2% in FY19 to 4.8% at the half.

Also encouraging to see the previously striggling Prosumer segment improve its loss from -$3.6m to just -$0.4m. Revenue growth was 9%, with reduced costs and marketing spend driving the bottom line improvement. 

Results presentation can be viewed here

Significant selling by founder and also chairman.

Im out.

Morgans has raised its taregt price for Catapult from $1.72 to $2.19.

It has cited the renewal of the Australian Rugby Union contract, and other recent contract wins and increased conviction that Catapult will be self-sustaining by the next financial year.

It is forecasting an ~18% lift in sales for FY20 to $112.5m and an EBITDA of $15m. It expects Catapult to record a net profit in FY21 of $4.17m