The market seems to be a lot more excited about Pointerra's trading update than I am. The ACV update is not really an update at all except to say that previously flagged renewal negotiations are still ongoing. It seems like all will be revealed at an update on 28 April 2023. Hopefully that is the case.
They report a 'rebound' in cash receipts. It is true that at $3.3m it's the second highest quarter they've had for receipts. The problem is that cash in is not keeping pace with previously reported trailing ACV - not even nearly. If you track trailing 12-month cash in, it used to trail reported ACV from about 12 months prior. Not great but if you knew that was what to expect you could probably live with it. In late 2021 that started to slip and it was taking up to 18 months to convert ACV to cash. In today's update an 18-month trail seems like the good old days as trailing 12-month cash receipts doesn't even keep pace with the ACV from two years ago!
They describe their suite as a must-have platform. As difficult as it might be to deal with some of their US customers, I can't get my head around why they'd not pay for mission critical software nor take so long to renew.
[Not held]
I'm a bit frustrated with these guys. They're quarterly shows they've slipped back into cashflow negative territory but that's not what frustrates me. The nature of the business is such that it will be lumpy and $2.5m of receivables ($0.9m as at Dec) explains much of this. What frustrates me is how slowly the reality (i.e. cashflow/financials) is taking to catch up to the promise (i.e. ACV). It seems to be getting worse as well. In one of their presentations Pointerra helpfully highlight this for you. If you look at the graph below and look at the most recent customer receipt number of $7.8m and draw a line directly left you have to go all the way back to the ACV reported in Q3 FY21 to get an approximate equivalent. But hang on - it reports cash in AUD and ACV in USD so it's actually a lot worse than that. Firstly, if you're trying to link cash and ACV (and I can't see that they belong in the same graph if you're not) why would you put two different currencies on the same axis? Probably more importantly though, it means you have to go all the way back to Q1 FY21 to get an approximation of FY22 cash. It's befuddling...
[Nibbled at them in RL during June tax loss selling]
3DP is one that continues to split the Strawman community. It's well and truly in my (extensive) too hard basket but any company that funds it's own existence with positive cashflow at their state of maturity is doing something right.
[Not held]