Pointerra achieved revenue of $6.6M, at a ($0.7M) loss in the second half of 2022.

Pointerra invoiced $4.2 million in the final quarter. I suspect a fair chunk of this was invoiced in late June, with deferred revenue at $1.45 M (down from $1.8 M on Dec 31).

With the AUD vs USD down about 10% since the beginning of the financial year, Pointerra will benefit from exchange rate tailwinds, with a fair hunk of costs in AUD.

Assuming ACV leads revenue by 5 quarters, Pointerra revenue should be around $7.5 m AUD this half year, which should tip Pointerra into profitability, noting gross margins are running above 80%.

DISC - HELD.

Following the 3DP presentation, I thought I would play the role of devils advocate, & provide a bear case.  For full disclosure, I sold half my position following their most recent 4C report.   I outline my reasons below:

The key metric Pointerra use to communicate revenue growth is ACV (annualised contrct value).  From what I understand, this includes all revenue, which is not neccessarily recurring revenue.  

ACV grew 100% during H1 2021, but then decelerrated in Q3, with ACV growth of just 15% over Q3.   Then, in Q4, ACV grew 29% from Q3.  Sounds like growth re-accelerated right?   Well, no.  

You see, Q4 included the ACV of Airovant, its most recent acquisition.  Pointerra included some of the Airovant revenue in the ACV for Q4.  

I queried this with Ian Olsen, and he confirmed a portion fo Airvant revenue was included in the Q4 reported ACV.  I asked if he could reveal the value of Airovant revenue included in the ACV for Q4.  He declined to do so, saying: "We haven’t “lumped” Airovant revenue into our ACV. Rather we have reviewed the acquired customer contracts and relationships and determined what quantum fits within our approach to valuing ACV. Notably we have been conservative in this approach.   "

Now, we know Airovant reported annual revenue as reported by Pointerra was about $1.9 M AUD. If this was included in the ACV for Q4, organic growth may have slowed to 11% over Q4. BUT WE DO NOT KNOW THE ORGANIC GROWTH OF POINTERRA FOR Q4 - This is only known by management. 

I alos raised concerns regarding Pointerra paying RAAS for favourable research reports and his response was: 

" Your observations on our use of RaaS also highlight the different perspectives we both appear to have. Finola Burke (founder of RaaS) was a successful analyst at a global investment bank and in establishing her independent research business, many of the fund managers and tier 1 brokers we have been speaking to over the past 3-4 years have recommended (even urged) us to consider using the services of her business to build a bottom-up cashflow model for Pointerra to assist them in their investment decisions.  

Yes we pay RaaS for their service and there is no such thing as unpaid research when you understand that a broking house that earns income from a listed company via placement fees and corporate advisory mandates often provides research “at no cost” to the company. 

We currently do not have a broker that is under any sort of mandate and accordingly Finola’s research is not only appropriate but highly valued by institutional and HNW investors looking at Pointerra. " 

Ian outlined his case.  I will leave it to individuals to draw their own conclusions. 

Currently, Pointerra is valued at an EV/S ratio of about 18.  It will need to maintain organic growth rates above 50% over the next 3 years to justify this valuation. This means ACV will need to hit $40 M AUD by the beginning of FY2025.  

My bear case is, Pointerra's growth has deccelerated over the past two quarters, it is unclear how significant this deceleration has been, and management choose not to reveal the information necessary to determine this. 

Although, it is a positive that Ian took time to respond to my queries, the cloudy reporting on organic growth rates; and paid, promotional reports are two red flags in my opinion.     

If EV/S growth fall short of expectations, say they only achieve 30% organic growth pa over the next 3 years, shareholders can expect a +40% haircut should they hold on during this deceleration.   

Shareholders need to watch the Q1 report closely, noting that Q1 is typically their strongest quarter in relation to growth in ACV for the year.   

I am concerned about the lack of clarity regardinf ACV growth in realtino to the Airovant acquisition.   I suspect ACV from Airovant was included.  If this is the casse, then revenue growth has slowed significantly. 

This lack of clarity / transparency is a bit of a red flag for me. 

15% growth in ACV on previous quarter.   This is 75% annualised growth rate.   Certainly a slow down, from prior quarters.  

Frankly, the valuation was getting rather silly.   A pullback was inevitable.  

Poiterra released their Q3 cashflow report today/ key takeaways:

1) Record receipts of $1.374 M. 

2) Cashflow positive.  

3) Admin costs less than 15% of revenue - Volpara, that is where you need to be. 

4) Sales Growth & Business Development

Growth in revenue from existing customers, as well as new customer onboarding.  Pointerra report COVID-19 economic stimulus packages are a strong tailwind, and is accelerating innovation and the digital transformation of the AEC (Architecture, Engineering, & Construction)  sector. 

Reported pipeline in defence sector is building, with Pointerra engaging in 25 defence contract opportunities.  I imagine thsi will take a while to convert. 

3Dinsight.ai - Significant progress over the quarter, with a partnership with Here Technologies to share and access their massive LiDAR dataset.  Pointerra negotiating with other cusomers and partners to grow network.  Pointerrra seek to share revenue with Here Technologies (and customers & partners)  from subscription style revenue model.  Pointerra expect this business unit will become the largest and most vlauable part of the Pointerra platform.   IMHO, THE POTENTIAL FOR ESTABLISHING A POWERFUL NETWORK EFFECT IN THIS BUSINESS IS HUGE. 

5) Team growth - heacount increased from 23 to 27, mainly in sales.   Pointerra flagger further recruitment over the coming quarters. 

6) Product Development / R & D

A number of UI improvements, improvements in analytics in relation to rail and road infrastructure, brower based point cloud editing is now in beta mode, close to release.  Automation of LiDAR capture to point cloud processing si being tested and used by some customers.  

Strong pipeline of enhancements flagged.  

DISC - I HOLD.  

Pointerra have reported ACV has grown 18% over the past 6 weeks to $5.82 M USD.   

It is mantaining the strong growth experienced during Q1 2021.  

DISC - I hold.  

Pointerra are hiring a US Business development manager.  The roles KPI is all about sales and business development, and it is encouraging Pointerra are investing in growing their sales piepline and opportunities.   

It is a sign of confidence in the opportunity, but it will be 12-14 months before we see any results from this new sales hire. 

Ok, valuation is looking very stretched.  But category crushing busineses, servicing secular changes will always be pricey.  

High gross margins will allow Pointerra to grow exponentially with limited capital expenditure requirements.  Having a look at similar businesses, and their valuations could be instructive for investors.   

To help understand this, I have looked at a company with the same high gross margins and growth rate.  The company I compared Pointerra to is WIX.com.   Six or seven years ago, WIX.com was growing revenue at an annualised rate of 88%, and had an EV/S ratio of 40.     WIX.com has rallied over the past 4 months, and has an EV/s ration well above my table below, but I hope it gives investors an idea of how one may consider Pointerra's currnet valuation to be fair value. 

As the table shows, Pointerra has to grow rapidly to justify its valuation, but the growth rates required are certainly achievable, as demonstrated by category crushing businesses.  PS - I don't think WIX.com is by any means a category crusher, and is faced with strong competition, a situation Pointerra is not faced with (but may change as its success attracts competitors).   

August Sales Update - I was wondering why there was no business update with the full year results - now we know! The separate release this morning has advised ACV grew 33% in the past month. 

It was a carefully worded release, ponting out no single contract win triggered a continuous disclosure obligation.   

Pointerra are now profitable on a ACV run-rate basis.   

Pointera is also launching its data marketplace, which is a really interesting opportunity.   This business places Pointerra as a market aggregator, bringing data vendors and buyers together via their platform, built on its unique technology.  Its early days, but this could develop into a network effect driven platform - the more users and vendors on the platform, the stronger the business becomes.    

Key takeaways:

1) ACV growth accelerates to 33% growth on Q3 to $4.0 million, as at July 30, 2020.  It can be lumpy, so best looking at it on an nnualised basis.  It has grown around 115% year-on-year.   

2) The company is now on a cashflow breakeven runrate, based on forecast operating cots.  

3) Company intends to accelerate hiring sales and software development staff, given the healthy sles pipeline, and additional funding provided by Bevan Slattery's strategic investment.   

Really pleased to see the benefits of its high operating leverage going forward, which will allow the business to invest in the platform, and the sales team to build a leadership position in this potentally huge market.  

Key takeaways:

1) Maiden cashflow breakeven quarter, as promised.   Costs actually fell, with a recuction in Admin costs, and othere costs relatively flat.   It is one feature I like about Pointerra management- They are careful with their money.

2) Big wins foreshadowed, namely:

 - Pacific Gas & Electric (PG & E )have completed proof of concept project, and are in teh process of negotiating an enterprise deal.  They will become Pointerra largest customer.  I belive Presionhawk is Pointerra's largest customer atm, at +$300 k per annum.   This deal alone ispossibly a 10% boost to revenue.  

- Through the P G & E deal,  Pointerra has developed a relationship with Accenture, who is seeking to pursue further global opportunities through their Energy Consulting Services division. 

- Precisionhawk extended their existing commercial relationship with Pointerra. 

- Florida Power & Light extended the commercial agreement with Pointerra over the quarter.   

3) New use cases flagged in the film and television sector for their 3D marketplace business.   

4) Platform development - Further devleopment to the platform including 3D CAD in the cloud feature.   Linking pointcloud to 3D CAD is the holy grail of infrastructure and precinct design - one development to watch with interest.  

Pointerra will provide an enterprise sales update next week.   

Key highlights:

1) ACV grew 15% ove rthe past three months to $3.32 M.

2) Receipts of $532k fo rthe quarter. Quarterly cash burn falls to $297k, with $2.2M in the bank.

3) Management anticipate Q4 2020 to be cashflow breakeven!

4) Management reported increase in demand in Q3, furthermore, they reported :

"Subsequent to the 23 March 2020 ASX announcement Pointerra has been approached by additional enterprise prospects from the data capture (survey), engineering/construction and asset owner/operator sectors and is presently engaged in numerous additional platform evaluation activities for new enterprise prospects, including formal Requests for Proposal (RFP) and Requests for Quotation (RFQ) responses in Australia and the US."

5) Employee incentive share scheme will issue shares at 6c per share.   I think this is a  shareholder friendly decision, minimises diltution, and sets a higher performance bar.  

I think Pointerra has shown great cost management, and their capital light business is now showing promising operational leverage.    

DISC: Held

Ian Olsen, MD, reported:

- Pointerra is on the cusp of cashflow breakeven at the current Annualised Contract Value, with staff costs in AUD, and revenue in USD, currency tailwinds are having a very positive impact in the near term. 

- A captial raise is not anticipated to be needed, and Ian advised management will take a pay haircut if necessary to avoid such a scenario.  

- Ian reports Pointerra will be highly profitable when ACV exceeds $5-10 Million.  

- Accelerating interest from US utilities companies, apparently driven from WFH needs. 

- Major League baseball lead is being delayed by COVID-19, but is looking promising. 

- Florida State Survey is a potential $600 k ACV opportunity.  

- Very little churn reported - only 1 or 2 small customers.  

- Dewberry is their largest mapping customer.  

- Nearmap captures pixels, whereas Pointerra captures points.  

- New recruits are demonstrating the benefits in changing their clients workflows (through Pointerra) to reduce geospatial data storage and analytics costs.  

3DP released their HY report. After close - not a great look.  Key takeaways:

1) Revenue of $490k, up from $94 k (or up 413%)  on pcp.

2) R & D costs of $767k, up 37% on pcp.

3) Admin expenses of $605k up 24% on pcp.  

4) operating cashflow of -$726k down from -$641k on pcp. 

5) Cash in bank: $2.5M  

Management reported ACV  at the end of last financial year to be $1.85 million, so it is concerning revenue does not reflect the reported ACV.   Management have advised this  is due to delays in onboarding customers, and have warned revenue and receipts will remain lumpy due to variable payment cycles.    I will give management the benefit of the doubt for the next 1-2 quarters.  

ACV grew up $1 million over the half year.   

3DP report they have a sizable sales pipeline in Austlraian and US, and are as a result, they are recruiting to expand their sales & product development capability.  

Some questions around the business.  We will have an answer by July 30.  

Ok,  cash receipts are very scary, dropping to just $180k.  This was blamed on a delay in payment from Precisionhawk due to an internal restructure, which is now fully resolved, as well as delayed commencment of a US state mapping project.   

I have learnt that there is often a 3-6 month delay in ACV being announced and the cashflow coming in the door.   

I would expect Q3 receipts to be around $600-800k. If it is below this, I will begin to question the validity of the stated ACV.   

There was more colour provided in the result.   Including:

1) ACV from Precisionhawk looks to be around $600-800 k.

2) New US state agency, which is just coming online, has an ACV of  $900k.  This one contract will contribute about $600-800k in ACV over the next 6-9 months.   

3) Major League baseball contract expected to be signed by April, and other US state agency projects have been flagged as in the sales pipeline, along with 5G comms infrastructure.

4)New Florida Light and Power emergency response opportunity flagged as generating significant DPaaS and AaaS revenue, which has not yet been included in ACV.  

With ACV at $2.84 M, it is growing nicely, however, the receipts are not matching ACV.  I am accepting management's explanation, and given there is $2.5 M in the bank, there is time to wait and see.  

I am capping my positon to 2.5-3.0%, which is probably a little too high for such a high risk opportunity....

This extract from their AGM presentation today I think, is a massive opportunity.   This could be a huge cost saver for engineering firms.

This is a future opportunity with a huge TAM.   Something to watch develop going forward.  I think ti woill need a lot of development to get it to integrate with Autodesk packages and the like. 

ACV actually grew by $0.56 M, compared to my estimate of $0.5 M in my previous straw.

This is an annualised rate of 185%. albeit off a low base.   

Costs are in line with forecast, and is growing at a modest rate, albeit they will continue to burn cash into 2021.   

A capital raise must be in the works, but I am impressed with the cost discipline shown.  

A good quarter for sure, and with the onboarding of their recent customers, will ensure strong growth for the next 2-3 quarters. 

Two new members have been appointed to the US team, a new head of operations, and a new VP of Technology. 

Ian Oslen said: "Unprecedented growth in US customer demand for Pointerra's cloud platform for 3D data and analytics has lead us to find these two exceptional people. "

Interestingly, they both originated from Precisionhawk, a customer of Pointerra.  

I think Pointerra is a great fit for the Precisionhawk business, which has been on an acquisiiton spree.   Something to keep an eye on.

3DP reported some big wins over the quarter, namely a 500 Terabyte deployment that will be gradually deployed over this financial year.   To get some perspective on the size of this win, 3DP has 12 trillion 3D data points deployed on their platform - I think this equates to 180 Terabytes of data.  

on top of this, two US power utility wins were also announced, along with the city of Newcastle, and a new use case (facilities management was highlighted.   

I think this works out to be another $500k in ACV that has been won over the past few months, which is a really positive start for the FY.  On track for ACV of $3.6-4.0 million by June 30 2020.  

Key points:

1) Pointerra appear to have this market to themselves, and appear to have created the market.  

2) Pointerra have very high gross margins, and as a result is a highly scalable service, and requires little capital. 

3) Pointerra is continuing to invest in its platform. Improving its functionslity, value, and TAM.  

4) Data and analytics as a service model should result in sticky revenue.   this needs to be watched closely, but it appears to offier significant cost savings to subscribers, making a switch potentially an expensive ecercise.  

OK, the numbers are attached.  Green are reported numbers, red are my forecasts.   Q on Q for the previous quarters has been 54% and 246% respectively. I have used a piddling 15% in my analysis.  Based on my assessment, 3DP will reach breakeven by the end of the 2020 FY, and generate at least $2.8 M in revenue.   If you double the Q on Q growth rates to 30%, still well below trend, revenue will hit $4 M.  

Given the high gross margins in the business, massive TAM, and limited competition, I think Pointerra can grow very rapidly from this low base.   I think it should be valued at 15 times FY2020 revenue.  That could be a market cap of $45 - 60 M by the end of FY 2020.   

Risks:  New competitor, with greater resources, enters the market and out competes for market share.    Pointerra have very limited resources, it is vulnerable to a company with VC money to take market share.  

It will have only 12-24 months lead - expect a CR to accelerate growth. 

Jacobs are a relatively new client for Pointerra, after trialling around the time of this project........https://www.linkedin.com/feed/update/urn:li:activity:6555704530418397184/?commentUrn=urn%3Ali%3Acomment%3A(ugcPost%3A6555704035725410305%2C6556379360620871681)

Jacobs Engineers are impressed with the Pointerra service.

Postscript - there is a possibility Pointerra are stalking Strawman - be careful what you say......:) https://twitter.com/3DPointerra/status/1151342559702085632

3D Pointcloud sector is very much a nascent industry, with a few emerging players, but no clear market leader it seems.   Pointerra has competition, but they all appear to be early stage businesses, with limited capital.   This can change rapidly, and it is something to watch. 

Point Cloud Technology - Point Cloud Technology offers IT solutions for the management, computational use, and application of unlimited 3D point clouds.

Potsdam, Brandenburg, Germany

They only have 5 employees it seems.  

Point Cloud Technology GmbH is a software technology company that concentrates on innovative IT solutions designed for unlimited point clouds. Our company is a spin-off of the Hasso Plattner Institute and based in Potsdam. We provide solutions to efficiently integrate, update, manage, analyze, and visualize point clouds required by a variety of applications. Major characteristics of our solutions are scalable processing and analysis algorithms to establish, improve, and speed up applications, systems, and workflows. Our point cloud engine is used by companies and national mapping agencies for different industries and fields of application.

Clients include:  Oracle, Ordnancce Survey, DB Netze, Cathx Ocean, be Berlin.  

Looks to be Europe focused - My impresson is Point Cloud technology is not a threat to Pointerra at this point in time.  My impression they have inadequate funding / resources to be athreat at this stage.  

Geovast3D / Flyvast is another competitor.  french based, less than 10 employees.  Limited resources it seems.   Not much of a threat in the US market for now.  

Founder led, committed management team.   

Case in point, I joined up to Pointerra as a trial subsriber, 20 minutes later at 9:30 in the evening,  Ian Olson (Managing director/founder) requested to connect with me on Linkedin !   Perhaps there is a sales team that does this for him???

It is clear every lead is followed by the sales team / system.