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#4C - well, right at the back..
Added 2 months ago

Oh boy, 16 pages of high gloss....

Was it @Wini that coined the law (sorry if it was someone else) regarding the number of pretty pictures stabled to the front of the 4C's inverse relationship to the result contained within the 4C?

The headline number of customer receipts is down to $0.77M (from Q2 $1.33M). To be fair, the shiny picture that highlights $1.04M has been received in this April (2024) alone is a solid data point...





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##Quarterly Review
Added 2 months ago

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From a recent Entergy pres:

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#ASX Announcements
Last edited 3 months ago

So the "material contract" was a bit of a whimper, but hey, atleast it wasn't bad news...

6A1197324_3DP.pdf

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Valuation of $0.080
Edited 3 months ago

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#Half Review
Added 3 months ago

The Good

  • Partnerships with data capture hardware providers will help reach wider markets and use cases. These companies do tend to have their own software solutions though.

https://www.yellowscan.com/

https://www.teledyneoptech.com/En/Home/

  • Currently pending contract announcement


The Not So Good

  • Customer receipts of $1.33m. Cash receipts are now trending down over the long term.

a99792c50b93079bad325b26224f286cef754e.jpeg

  • With operational cash outflows of $1.45m the company's cash balance is now at $1.5m. (plus addition of $1.04m placement). This leaves room for just over a quarter at the current cash burn rate. The directors believe that the cash will be coming, and its been repeated for the last several quarters.
  • 1f9c2f20a860c8192d9ade45bb81021a3bc7c0.jpeg
  • It is now coming down to do or die for Pointerra in this regard. Looking at the expenses, it doesn’t look like there are many areas where spending could be stopped easily, unless they look at cuts to the staff situation.

b2d98b87cc4c98830ce112f2845b79ed7fd054.jpeg

There are also reportedly $1.5m in deferred payments due in H2, which could help the situation.

  • Based on all the positive developments in the slide deck, one would think that the company is kicking goals. Alot of the statements sound good, but it is hard to quantify anything from the updates, and historically they have not translated to revenue growth.
  • It already has been discussed heavily here, but failing to meet ASX requirements for trading halt / suspension highlights some of the issues which have been ongoing for some time.


Watch Status

Deteriorating

185781871f03e6565e2886774253597f06e6b9.jpeg

Valuation Status

Increase likelihood of bear case

fa22ec5de752246a8cc6e1470e2e850ebbe4a9.jpeg

*FY24 Annualised numbers

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What To Watch

  • Grid reliance programs are set to restart in CY24.
  • Engaged in discussions with several new U.S energy companies for support climate change response initiatives. First round of federal funding announced, second round is open

https://www.energy.gov/gdo/grid-resilience-and-innovation-partnerships-grip-program-projects

  • Negotiating with global engineering company (Jacobs?) delivering a digital twin. If successful this will provide a good case study on application of the portfolio.
  • Further deals with Enel across operating regions outside of Columbia (Carried Over)
  • Amazon start up delayed from December to Q4FY24.
  • Updates to the start of the Entergy program
  • Use of the pointerra platform by Gridvision

https://gridvision.com.au/

  • Results from pipeline inspection trials - 500km gas pipeline - Working with several partners, this could be the start of a new growth vertical.
  • Digital Twin integration from construction with an Australian Oil and Gas company. It would be good to get more detail on how they are executing on this.
  • Next generation point cloud data format now completed testing and rollout during Q3.
  • Cash flow + and EBITDA + still reported as attainable in FY24. 


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#Additional Observations : H1 F
Added 3 months ago

With the release of the H1 Results after the close on Friday, I did a 'snapshot' analysis on those metrics (see my previous post) which displays progress (or lack thereof) during the period, this intended to highlight the strength of 'carry' into the second Half. The NAV plunging to more than - AUD 3m (Balance Sheet Insolvency) coupled with the Auditors Report coverage on the Company's ability to continue to operate as a Going Concern constitute a sobering thought which cannot be dismissed. The Deferred Revenue and Receivables numbers as at 31 Dec hardly inspire and the AUD 2 m shortfall when comparing Receivables and Payables number all suggests the squeeze is set to continue. The AUD 100k decline in Payables is not material.

I have subsequently gone through the narrative + numbers in more detail and can comment as follows :

  • My comment on the Company returning to Positive Operating Cash Flow in H2 was incorrect. Whilst this is certainly implied, the Company said..." H2 FY24 offers the opportunity to showcase the capability with a view to the delivery of a POSITIVE H2 EARNINGS result for the Company." This becomes a message on the Income Statement Revenue) opposed to the Balance sheet (Cash). Also a huge uptick in terms of aspiration.
  • The narrative clearly states that the program delays are resolved and the Utility spend is coming back. This coincides with the fact in the USA, the financial year runs January to December. So Utilities are cashed up interms of Budgetry spend. Tax credits will be flowing towards Utilities from the Fed's Infrastructure USD 1.25 TRILLION Infrastructure Resiliency & new Climate Change intergrations. Remember Data Capture & Analytics will feature as a 'front end' activity in any plan in support of prioritizing work.
  • Right now, the ASX have suspended Pointerra regarding an announcement on a 'Material Contract Award'. Amazon roll-out is planned for Q4 FY 24.
  • Then, the Company have advised that during the Half Year, spend by existing Customers grew across Pointerra's target market sectors with the award of multiple new contracts with Existing and New Customers. So, do we have a new pipiline of growth across the non Utiliy verticals.
  • Building on the above, they report that the Company continues to EXECUTE on it's Strategy in both Mining and Oil & Gas Sectors, focusing on the use of Pointerra3D to support Capex, Operations & Maintenance with an Australian Miner. Implies awarded work in progress IMO.


If we go back to the key message in the H1 Financials. " The Recorded Revenue & Customer Receipts were well below Company expectations due to previously communicated program delays with KEY US Energy Utility Companies, which impacted the Company's Invoicing and Cash collection, ALL OF WHICH are expected to resolve during H2 FY24.

In closing we have felt the pain of the pause in buying by the US Utities. If they are back, Revenues will ramp USD 10m / year based on FY 22 numbers, Then add the Entergy deal conservatively worth USD 7 m a year PLUS

  • PLUS Amazon
  • PLUS further participation in Fed's USD 1.25 TRILLION Infrastructure Resilliency Program
  • PLUS growth ex numerous new Partnerships
  • PLUS new momentum in other verticals
  • PLUS new geographies


Having done the Research on the process being adopted by Utilities to embrace the ginormous USA Infrastructure andClimate Change agenda + validating that the 'Pause' is real, I am staying the course on this one. Can reassess with the ASXapproval 'material contract' announcement, hopefully this week, the Q3 4c (end April), the Q4 4c (end July), the FY 2024 Financials and if all fails, a Banya Software takeover offer where Ian & Team remain involved in the Business and we shareholders get offered x cents per share.

RobW

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#H1 FY24 Financials
Added 4 months ago

Despite still being in an ASX Suspension Period pending resolve on an issue over an announcement regarding a 'Material' Contract, the Company released their Half Year results after the market closed.

Herewith a copy of my Hot Copper post which provides some early observations.....

The Half Year Financials were never going to be pretty. The Company is essentially in what they call Balance Sheet Insolvency. Whilst this is different to trading Insolvent (where you cannot TIMEOUSLY fulfil your obligations in terms of Liabilities),the underlying comparisons over the last 6 months do not point to an improving situation. 

Negative NAV ...extends from AUD 1.581m to AUD 3.207m

Receivables... down from AUD 2.723m to AUD 0.606m (compared to Trade&Payables of AUD2.518m)

Deferred Revenue ...down from AUD 2.712m to AUD 2.270m. Note : A portion of this may be for Advanced Payments and therefore not Accessable.

And finally, the only 'small' positive

Trade & Other Payables .... down (less than previous) from AUD 2.615m to AUD 2.518m


Lots to digest in the report, but the above IMO points to the urgent need for a capital injection. CR, loan or if Directors stump up. Debtor Factoring... not much to work with.

The Company talk of a cash flow positive H2. Had they used the ' Changes since 31 Dec. comment section' to provide some numbers on Cash Receipts during Jan & Feb or booked Revenue since 1 Jan, may have supported their stated confidence on a rebound. But not to be, Just the confirmation of the AUD 1m placement to an original Founder. Helps but not enough to fix the above.

Next 4 months crucial IMO.

Rokewa

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#ASX Suspension
Added 4 months ago

ASX have suspended Pointerra for not responding regarding details / content of 'a material contract award' announcement which justified their trading halt on the 26th. Announcement was not forthcoming this am and the ASX challenge was yesterday (27th). Welcome the fact that the ASX are all over this. Time for Ian to realise Pointerra is a listed Company and non compliance has consequences. Recent placement of 13 m shares at 8 cents (90% premium to the market price ??)

All said, the probability of Pointerra delisting and going the Banya Software route is up a notch.

Let's see how things unfold. H1 FY 24 results due by COB Thursday.

RobW

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#Trading Hault
Added 4 months ago

Any Ideas?

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#Partnership
Last edited 4 months ago

Partnership with Emesent confirmed by Emesent. This is good news, they have a good grip on Autonomous flight lidar solutions and are quite large in the mining industry around the world.


Emesent are also out of Brisbane a good Australian success story.



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#ASX Announcements
Added 5 months ago

Pointerra have updated the market this morning after appointing a strategic reseller for the Middle East region -- specifically to 'resell and implement the Pointerra 3D Digital Twin Platform".

With an initial term of 2 years, the agreement does not contain any minimum sales or revenue targets. It currently isn't material and it is not possible to currently quantify any revenue impact for the company. The update is more noise and unnecessary of a release to the market.

My take: this is likely another classic 'must be seen to be doing something' announcement to the market before releasing another set of subpar results.

Disc: NOT HELD

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#ARR
stale
Added 6 months ago

The company won't reveal ARR (more on that below) but I think we can play a bit of financial Sodoku and make a reasonable estimate.

The Australian business is pretty easy. Lots of smaller, straight forward subscription contracts. Of the $2.2m revenue last financial year, I'm going to guess 80% of that is recurring (remaining 20% proof-of-concepts and short term projects). This gives $2.2m * 0.8 = $1.8m.

For the US, let's take the past 2 years revenue and subtract out the announced non-recurring contracts. Note, 2 years is important because a lot of the contracts run across multiple financial years.

This gives $13.1mAUD reported revenue less ~$6.7mAUD for the non-recurring deals announced 20-Sept-21 and 14-Dec-21. I have made some rough estimates here about the recurring portion of the original Entergy deal and an allowance for one-off work associated with hurricanes Ian and Nicole.

This leaves us with $3.2m pa ([$13.1m - $6.7m] / 2yrs). I'm going to take 50% of this as recurring. This might seem a little harsh but given the large value of announced PoCs and one-off work, I don't want to be overly optimistic. There is also a decent chance that some of that 2year old revenue has churned (haven't heard much about Eversource or PG&E lately...). So we have $3.2m * 0.5 = $1.6m.

A running total of $3.4m ($1.8m Aus + $1.6m USA).

Now it's time to add in the recurring deals that have been recently announced but won't be showing up in the accounts yet.

We have $1.35mUSD from the FPL expansion and $264kAUD from Main Roads announced 31-Jan-23. Revenue recognition isn't at all clear here but I will guess only 50% of the above was recognised as revenue in FY23. So +$1.1mAUD.

The Enel subscription from the last sales update is good for another $0.5mAUD.

This gives a grand total of $5mAUD at the last reporting date.

This is important because the company chose *not* to disclose ARR at this point in time. Logically, the only reason for this is because the ARR figure couldn't support the market cap (~$70m at the time). A price/ARR of 14x would be a bit of a stretch for a sub-scale, loss making business in the current market. And it would be quite shocking compared to the previously announced ACV in excess of $20mUSD. So I think I'm in the right ballpark.

Note I have not included the Amazon contract, the Entergy grid-hardening deal or the latest enterprise deal with a Tier-1 miner. These contracts alone could easily add another $5mAUD. My guess is that the company is waiting on these to come through to try and present a respectable ARR number in the new year.

I'd love it if anyone can provide any feedback on the numbers I've presented. Especially if there are obvious errors. This estimate is central to my thesis, so I'd love to know if it's way off.

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#CEO Interview
stale
Added 7 months ago

Ian Olsen has been interviewed by RAAS https://www.raasgroup.com/

One of their services is to "We work with small and micro-cap companies to raise their profile and generate market interest."

I wonder why share price is important? Interesting given recent board to change to include guy from Banyan software.

Anyway, my points from the interview.

Not much different here to the recent Strawman interview.

https://www.pointerra.com/investors/presentations/

  • Ian said FY 23 was unacceptable result
  • planning to be EBITDA and cash flow positive this FY
  • Got caught on wrong side of big utility program pauses and had also increased costs with new exec hires
  • Calendar 24/25 in US will significant
  • He says he is being told to worry about whether they have enough capacity for future years but the utility programs are huge and need to happen. The programs are multi-year and unprecedented in how much data is to be created
  • Expects FY H2 to start to see this revenue come through
  • He defends the lack of ARR figure by saying the he want the utilities revenue to be baked in and not program related like it is currently. He is thinking the ARR figure will be available Q3 rather than before Xmas
  • They have a Tier 1 global mining customer who is deploying them across more than 40 sites in more than 12 countries. Looks like more than $1m/year. Takes a while to roll out but no timeframe provided.
  • Amazon digital twin work is supposed to be a 700 site rollout and > $1M ARR
  • Work has restarted planning for rollout. No timeframe for when.
  • Work was paused when Amazon went through a restructure


So the revenue can has been kicked down the road to Q3.

Is he just trying to keep the ship afloat or will we look back at current share price and think it a bargain?

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#Business Model/Strategy
stale
Added 7 months ago

Easy to look past the recently announced Board Changes as all in the course of business. Someone stands down and someone new (with perfect skill set) steps up.AGM on the 22 November 2023.

Worth checking out the Banyan Software website. You will quickly realise that the newly appointed Non Exec Director may have a different agenda. Whether Ian has initiated this is anybody's guess, but on the back of a challenging year (program delays), the inability to land the FULL cap raise, the fall-out in terms of investor sentiment and the share price, and then comments like 90 days comes around too quickly (ASX reporting), just maybe they are seeing this as a pathway to de-list / go Private.

Herewith Banya Software's Xmas message end CY22....

Looking forward to an exciting 2023!

We're excited to have grown to 25 businesses and over 1000 employees across North America, the UK and Europe, and Australia. And, we're proud to continue to be 100% referenceable by all the owners who have chosen us as the next permanent home for their business. There's significant capital behind us and we expect to be very active across Australia and New Zealand in the year ahead.

My money is on a much bigger agenda here.

RobW

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#History
stale
Added 7 months ago

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So back to close to 2019 share price levels. All these apparent contracts not converting- SP in free fall. Looks like the market is very clear about 3DPs performance. AGM will likely be a bloodbath.

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#Quarterly Review
stale
Added 7 months ago

Announcement

*Includes Notes from Strawman Meeting

The Good

  • Enel Columbia contract shows interest in Pointerra platform outside of the U.S utility companies. Although the $312k per year value is not material at this point, there is room for scope growth once a digital twin is developed and used for network Analytics. This is unlikely to happen until FY25. The other significant upside of this contract is that Enel operates across 29 countries, so there is potential for further contracts within the company.

https://www.enel.com/company/our-commitment

c7a79434ffe728778b7d88b002b0e6b122bda5.jpeg

  • The Emersent and Carbonix deals are not material, however it embeds Pointerra Core into a wider range of customers who use Emersent and Carbonix for data capture. In the meeting Ian indicated that customers were pushing for this partnership. 


The Not So Good

  • Major customer and diversification risks have become evident over the past several quarters where ongoing issues and delays from a few significant contracts have led to cash receipts 60%  (See @mikebrisy charts for clearer detail on cash flows ) of what they were in Q1FY23. Ian highlighted this in the meeting and is working to broaden the customer base. The risk I see here is that Pointerra starts to stretch itself too far and loses any of the advantages that they have in the market.

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  • Cash balance of $2.8m. Expenses didn’t increase significantly over the quarter, but staff costs are at the heights they have been. These have been historically higher in Q1, so potentially could come back in Q2.
  • Amazon program which was material enough to warrant announcements was put on hold without market updates


Watch Status

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What To Watch

  • Further deals with Enel across operating regions outside of Columbia
  • Amazon set to start up their program again in December. There wasn’t any indication on how far this progressed before it was put on hold, 


NVIDA also appears to be working in this space with Amazon, but looks to be more oriented towards design and work flow.

https://docs.omniverse.nvidia.com/digital-twins/latest/warehouse-digital-twins/use-cases.html 


  • Potential further partnership announcements in the works in the data capture space
  • The Entergy program could have significant impacts on FY24 revenue depending of the scale of roll-out and date of commencement.
  • Tier 1 miner going from mine site level to 45 sites globally and potentially seven figure ARR contract. If this is implemented 
  • Growth in Road, Rail, Water, Oil & Gas in Australia. After North America business review, sales resources to focus on similar wider sectors to help diversify the business streams.
  • The company also views ports and airports (U.S and Australia) as material growth opportunities over the coming year.
  • Next generation point cloud data format is entering testing.
  • Lots of talk about ARR. Watch to see when this is reported going forward and how consistent it is.
  • Ian seems to think cash flow + and EBITDA + are both attainable in FY24. Numbers will need to improve on what came out in Q1
  • Ian mentioned the names of Encore, Duke, Dominion, National Grid as potential utility customers in the pipeline.


From a quick scan of the websites it looks like National Grid could be the closest.


National Grid

https://www.nationalgrid.com/stories/engineering-innovation-stories/innovative-and-futuristic-technologies-improving-our-electricity-networks



Dominion

https://www.dominionenergy.com/our-stories/five-ways-we-use-drones


Duke

https://www.youtube.com/watch?v=ID1AF0AQdeo

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#CEO Interview
stale
Added 8 months ago

Curious as to what others thought of the meeting today.

On one hand, I can totally take Ian at face value:

The company was growing rapidly, funded by extremely supportive capital markets and they had a monster opportunity ahead of them... and then, with the big deals concentrated in a specific geography/sector, their giant US counterparties pulled back on all CAPEX as they got whacked with higher rates and constrained by capped pricing.

So 3DP went from (arguably realistically) expecting $3-4m in quarterly cash flows, to finding that they didn't even have enough to fund costs and ongoing development. In short, the world changed on them before they could hit sustainable profitability and are now faced with the challenge of funding operations and growth, but with an ever shrinking balance sheet.

Importantly, according to Ian, these projects have not gone away, they were suspended instead of cancelled, and are expected to resume in the coming months. To such an extent that Ian seems to think they can deliver CF and EBITDA +'ve results for FY24.

If true, shares are probably extremely cheap. We'll see a confluence of revenue booked in one of these quarters which will prompt a material re-rate as the growth narrative is once again seen as realistic.

On the other hand...

Regardless of the external operating environment, the company has scored some big home goals in over-promising, cancelling a core reported metric and poorly executing a capital raise. Rightly or wrongly, that's done a lot to undermine trust. And trust is everything here.

Ian talks a good game, but until we see evidence of a turnaround, it's easy to take the assertions as wishful thinking. Even if the general nature of the situation is as Ian describes, there's still the potential for big clients to delay further, or renegotiate better terms. And there's not much spare cash left at this stage either..

I'd really like to give the company the benefit of the doubt, but cannot in good conscience add to my (now relatively tiny) position until we see more clarity and progress in the reported financials.


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#Sold
stale
Added 8 months ago

As expected.... sigh. Another underwhelming quarter, referencing project delays and promises that additional contracts are coming.

Fundamentally, my investment here looks to have been a bad one. @mikebrisy's recent analysis paints the perfect picture -- this is not mission critical software as my investment thesis initially suggested. They are struggling to win contracts, are no longer growing sufficiently and perhaps most importantly I no longer believe management are competent enough to take the business forward.

Last year in general was a shocker -- cash receipts collected went backwards considerably, while costs widened. This is continued evidence of more of the same. Perhaps what grinds my gears the most is management suggesting they had the capital required to operate sustainably, before eventually succumbing to what was a much-needed raise at dilutive levels. Their strategy has not been effective to date and I wouldn't be surprised if we hear the dreaded 'strategic review' in a year or two.

Stepping backwards, I think they have spread themselves too thin. This is a good case that demonstrates you should target certain industries/thematics and not try and be a 'jack of all trades' across the board. This approach is difficult when you are cash flow negative, particularly in the current environment where funding is increasingly difficult to obtain. I also don't think we can make a case that Pointerra are genuine market leaders, and their balance sheet and growth (or lack of) supports this.

More than anything else, my decision to sell at these levels boils down to the fact that this just doesn't appear to be a high-quality business like I once thought, and there are much better opportunities elsewhere.

Disc: sold

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#4C Report
stale
Added 8 months ago

Others here are following $3DP more closely than I am, so I will hold back on the broader commentary.

However, I have just updated my trend charts on CF.

Figure 1 - Quarterly Cash Flows

3bdc57208c31c96066e1235571cb51af926f62.png

The faint dotted green line is the trend on FCF over 8Q.

Just to highlight that the trends are fundamental, I have plotted the data in a rolling Trailing 12-Month format (TTM):

Figure 2; Cash Flow Trends TTM

a926ff1c24076c4f5f51f6a213b17e67ccc17d.png


This visualisation shows the same trends but takes out some of the noise.


My Key Takeaways

The business has declining receipts. But it can't control costs well enough. The gap between the receipts and costs trajectory is widening.

Absent a breakthrough, this is in danger of entering a death spiral. Not only does it lack scale, but its not even showing a trajectory to ever reach scale.

Not investible from my perspective.

Hopefully this provides some fodder for questions to Ian later today around sustainability of the business. (I'll have to catch up with the recording later, as I have other commitments today and can't attend.)

Disc: No longer held in RL and SM

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#September Quarter FY24 Update
stale
Added 8 months ago

An encouraging update, although quite vague from a financial standpoint.

New commercial agreements announced, one with an initial US$312k pa subscription, and all with expansion potential.

New Business Development hires to shorten sales cycles and land 7-figure contracts, and Amazon digital twin program for its distribution centres due to restart in December.

Will look to get some more detail when we speak with Ian tomorrow.

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#Not Feeling The Love
stale
Added 8 months ago

I bought Pointerra in middle 2021.

I have been disappointed at their progress , so far.

Generally I keep my shares , regardless of price , for 4 to 5 years.

Can anyone convince me to keep this stock and why ?

Thanks, Zorbia.

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#SPP Result
stale
Added 8 months ago

Well, this latest raise was an underwhelming affair.

Arguably, it all started on July 28 with a bullish announcement that Pointerra's utility partners were selected for a US$15b grid resilience CAPEX program. The detail was vague, but hinted at a significant revenue opportunity, and shares duly rose -- in fact, they more than doubled at one point (briefly).

A few days later the company's 4th quarter announcement showed a disappointing cash inflow, but this was explained as a timing issue with much of the shortfall received in July. The company said it "continues to self-fund organic growth". The ACV metric was again notably absent.

Two weeks later, Pointerra revealed it had raised $2m via an institutional placement at 12c per share (a 13% discount to the recent volume weighted trading price, but a 25% premium to where shares were at prior to July 28). Veritas, the lead manager for the raise, was paid $120k, or 6% of the total raised.

Shareholders were offered the same deal to raise a further $1.5m, but by this stage shares had returned to sub-10c, meaning any uptake would be at a 20%-odd premium to what you could get on market. Unsurprisingly, very few shareholders took up the offer, which raised just $195k, or 13% of the targeted total. Frankly, it's amazing they raised anything!

All told, the capital raised cost 6% in fees and a 2.8% dilution to existing shareholders. And all for a relative pittance in cash -- an amount that would have barely covered the FY23 cash burn.

I've lined up a meeting with Ian for the 31st of this month, but I assume the rationale will be they just needed a bit to help accelerate some growth and will be self-funded from here ("cross my heart and hope to die, stick a needle in my eye")

To be fair, they are dealing with big customers and project delays aren't uncommon for large CAPEX programs. They are a tiny company desperately trying to scale while continuing to invest in their product and resourcing. So maybe what we're dealing with here, and in other outcomes that fell short of expectations, is just a bit of over-exuberance from management, but which they genuinely feel is well founded.

But the fact is that they have damaged their reputation -- and that will take a long time to rebuild.

The lesson here for management is that it's usually best to under-promise and over-deliver. When you make bold claims you really just create a rod for your back, imo.

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#Media
stale
Added 10 months ago

Here’s a small exchange I came across on LinkedIn that I think highlights some of the issues that Pointerra may have with their sales and marketing to date.

I don’t typically pay too much attention to LinkedIn posts, however in through my work I do notice the difference that well presented case studies make when trying make a product selection and the subsequent commercial justification.


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#Media
stale
Added 10 months ago
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#Q4 FY23 4C
stale
Added 11 months ago

The market mood has really shifted for the better with Pointerra of late -- and not without some justification. But the latest 4C is somewhat lacking in my opinion.

Operating cash flow was significantly negative for the quarter (down $1.8m) with just $800k in customer cash receipts. That compares to cash receipts of $3.25m in prior quarter. This was apparently due to invoicing delays, and in July $1.8m has since been collected.

So hopefully just a timing issue, and the company says "the core business operation continues to self-fund organic growth across the business in Australia and the US."

Let's hope so -- there's less than $1.5m left in the bank.

The ACV chart -- long highlighted by the business -- was again absent. I think that's very poor form to simply abandon this metric.

Lots of fluff in the announcement and very little detail.

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#silentquarter
stale
Added 11 months ago

Trying to process how I feel about Pointerra’s radio silence in the last quarter.

On one hand, stopping a big client from churning is hardly worthy of an ASX release. This may be especially true for Ian who seems to have a love/hate relationship with the ASX’s announcement rules (he mentions this often in interviews).

On the other, the share price’s sabotage could have gotten leadership to be a little more promotional about any noteworthy progress made in the quarter. 

That a large client churned isn’t cause for the thesis to break for me. Clients churn even from good software, often with valid excuses on their end (we got bought out, we’re consolidating, CIO’s gone mad, etc…) 

But that a large client’s churned with growth otherwise completely stalled for one full year, with little progress elsewhere isn’t good. 

I’d love Pointerra to take this as an opportunity to step up their game in onboarding clients faster (like much faster), and also step up their game in how they report. I’d like them to lose the ACV metric and adopt a more standard ARR metric reflecting live use of software to date. 

Anyway, rant over, not much longer to wait now. If they report on the last business day of the month as they do normally, this would be the 28th.

Two weeks to go lads. 

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#Divestment Decision
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Added one year ago

Others have commented on today's news. I'll not repeat their content, buy add my assessment and decision.

The improvement in cashflow is good; however, $3.3m is still lower than two quarters ago. In a firm that needs to be growing strongly to justify its (albeit beaten down) valuation, it is hardly a need for celebration. I’m with @Noddy74 – I don’t share the market’s enthusiasm today. Perhaps the SP reaction was relief that the cash result wasn’t worse?

Cash receipts of $3.3m mean that the free cash surplus is likely to be thin, although it is good to hear that Ian believes this will be sustained going forward (although he now also has some new senior hires to pay.)

However, I’m still bothered by the unwillingness to give an ACV update. That means that without the contract renewal agreed, it looks bad. And as I’ve said before, I don’t trust management who only report discretionary metrics when they make them look good. The last entry in my spreadsheet was $20.1m in Oct-2022 up from $18.2m in Jun-22. So we are coming up to the anniversary and it sounds like the dial might not have moved much. Moreover, the result appears to be very dependent on a single customer. In the absence of newsflow of other large contracts, that sounds like an ongoing concentration risk.

Again, as @Noddy74 writes, if this product is so mission critical, why is the renegotiation of the contract taking so long?

I am pleased the CFO role has finally been filled. However, the musical chairs on the "Chief Growth Officers" roles - not one role but two (in a company that makes total annual revenues of the order of only $10m) continues to signal that things are not working to Ian's satisfaction on the customer wins front.

For me, It is time to look at the thesis. I originally held 3DP for three reasons:

• Leading tech platform for spatial data management with a large range of applications in multiple verticals

• Strong ACV and revenue growth

• Close to the inflection point, with potentially strong economics emerging

Looking back over the last 8Qs (and I appreciate I should wait for the 4C to fully update this straw, and therefore may prove to be premature):

• Cost growth has generally been ahead of or at least in step with growth in receipts

• We are still hovering around the inflection point. We first saw positive free cash flow in Sep. 2019. and have flirted with it on 3-4 occasions over the last 3.5 years

• ACV growth is now a question-mark

• Cash reserves are low

• Newsflow on new contracts / new customers has not been strong

Importantly, as @Noddy’s analysis shows, the operating economics are becoming a question-mark too, with the gap between ACV growth and growth in receipts expanding. What’s going on here? Are customers taking longer to use the product than anticipated? Is there drag in deploying it/customising it in each application?

I appreciate that it can take a long time to deliver “overnight success”. However, I’ve decided to move to the sideline with $3DP until the proposition becomes clearer. I recognise that in so doing I am crystallising a loss and if I buy back in in future, that I’ll give up the ground between maybe $0.105 (my sale price) and $0.20 or something similar. 

However, for me, in these higher risk small caps that are yet to become cash generative, the thesis requires strong revenue growth above cost growth. Taking the high risk of a cash burning proposition relies on the momentum of the top line growth and the emerging economics, and all that entails in terms of positive revenue retention and new customer wins. I’ve now gone 5 or 6 Q’s where I haven’t been convinced that $3DP is delivering this. The ACV reporting holdout is the final straw.

I have divested my position in $3DP (IRL and SM).

Disc: No longer held


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#Trading and ACV update - or no
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Added one year ago

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.

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[Not held]


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Valuation of $0.120
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Added one year ago


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#Trading & Operations Update
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Added one year ago


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Executive Appointments

In order to strengthen the important revenue generating business development teams in the Australian and US operations, the Company has identified 2 experienced executives to fill the roles of Chief Growth Officer (US Operations) and Chief Growth Officer (Australian Operations). Pointerra has also appointed a CFO to strengthen financial reporting and management at the Company.

Joe Gerczak commenced with the Company as Chief Growth Officer (US Operations) in early April 2023 and arrives at Pointerra following the sale of his previous venture, Smartronix to a US private equity investor.

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#sold out
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Added one year ago

Bevan Slattery has left the building.

Just lodged a "Ceasing to be a substantial holder" notice on the ASX.

Took 11.5m 3DP shares out this month at around the $0.11 mark.

So that will have been behind a lot of the selling.

He would have to be across the ACV numbers and other behind the scenes details.

So that may be behind his selling.

He's also just parachuted into the MP1 CEO hot seat after Vincent English left it still warm for him last week.

So that could also be a factor, we may never know.

Maybe Strawman can get him on the red phone - I assume he has a direct line to the higher ups for big issues like this?

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#H1 FY23 Result Notes
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Added one year ago

1/3/23 Half year results release notes

·        Disappoint market with sales flat PCP and down 40% on previous half explained as invoice timing for large customers (pcp case repeated has some credibility).

·        ACV figures withheld pending confirmation has impacted investor confidence.

·        Cash outflow (0.95m) well below loss (3.1m) due to improvement in AR balance, with expectations that sales expected for H1 will fall into H2 much like prior year…

·        Expecting positive CF in the next 2 quarters, but cap raise possible/likely if that doesn’t work out.

·        90% GM is maintained pointing to good operating leverage potential still in play.

·        Interesting to see share based payments as negative, reflecting resignation of entitled staff and hence forfeit of rights leading to a write back of the expense. Does this indicate staff moral or other issues? Note that 7m loan shares to KMP remain outstanding, no options or other rights to directors or KMP, so relatively clean/light SBC.

·        Expense increase Vs PCP is mostly US operations segment +2.3m Vs Australia +0.7m which aligns with sales growth opportunity.

·        Working capital deficiency (-372k) change from 30 Jun 22 (+3.1m) is almost totally explained by 3m reduction in AR balance over the period which also shows why Operating CF was significantly better than the P&L result for the half. The 30 Jun 22 AR balance was a blow out on historical averages so seems to be the main cause of the distortion. Not an issue.

Conclusion: Result could reflect the bumpy effect of a transition to large US customers for sales growth or be a red flag on execution and growth rates going forward. Will wait for more information on release of ACV to assess level of transparency of management and future growth expectations.

Valuation Range: $0.10 to $0.24 (based on 30% Vs 80% FY23 Sales growth, then 17% CAGR to 2030)


Disc: Own RL + SM

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Valuation of $0.070
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Added one year ago

I can't value the business until I get some confidence in the ACV numbers............I'll just use an EV/s of 4.4.

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Valuation of $0.100
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Added one year ago

Gulp...the DCF wasn't kind to Pointerra, but I think this was a useful exercise because it highlights the risks at play here. On one hand, you have a high margin potential business; one that will likely have no issues scaling due to the nature of its software. On the other hand, the business continues to have issues taking receipts from customers and there are some orange flags around staffing (mainly culture) and increasing costs.

H1 results won't be pretty reading -- admin expenses are higher than ever, while manufacturing and operating costs spiked in Q2 and are currently on track to be double that of last year. I am not seeing the evidence of operating leverage that I want to see.

Analysis of Pointerra's historical cash flow statements makes for tough reading:

dffeb23d7dcd02e538392e484cca9be550a884.png

Prior to FY22, the proceeding years suggested we might actually be seeing a business starting to scale.... until it didn't. FY22 bucked the trend; costs increased far quicker than cash intake. What we know about FY23 thus far suggests this trend has continued:

45df7e25fc0c136d2ef11a6a59d5a0f6469aeb.png

My DCF reflects this. I (generously) projected 200k FCF this year, before projecting 1m FCF in FY24, 2.5m in FY25 and 4m in FY26. With a discount rate of 8.4%, I reach a CV of 61m. Divide this by shares outstanding (677m) and I reach a valuation of 0.10c. This valuation isn't kind to the business, but I want to point out if anything it is probably a little aggressive -- I don't think the business will achieve cash flow positive this FY and we need to see significant improvement to the financials in the coming years. I also haven't accounted for dilution, Pointerra is running on the smell of an oily rag at the moment and a raise might be just around the corner. On a P/S ratio of 12x, an argument can be made that Pointerra is currently expensive. And on that note, things could still get much worse for shareholders. Unfortunately, that includes me, but only for the time being -- a few more underwhelming reporting periods and I will be cutting my losses.

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#Media
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Added one year ago

Ian appeared on ausbiz last week after what many of us will agree was a subpar 4C. For those that missed it, you can watch it here.

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#4C Result
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Added one year ago

$3DP issued its 2Q FY23 4C report today as well as an incomplete Enterprise Sales update.

Their Report Highlights:

• Multiple new material contracts awarded

• Quarterly cash receipts Q2 FY23 A$1.9 million

• Cash outflow from operations A$0.9 million

• Program delays by some US customers impacted invoicing in Q2

• Invoicing and cashflow expected to rebound in Q3 and Q4 FY23

• Core business operations continue self-funding organic growth

My takeaways

By any measure, a softer quarter. What makes is problematic is less the lower receipts compared with 1Q, but the PCP comparison - a higher cost base and materially lower receipts.

The premise of recurring revenue is that it recurs. So while there may be q-on-q lumpiness due toi the impact of payment phasing of material contracts, a growth SaaS company should show consistent annual growth - otherwise it is no growing!

See my usual CF trend analysis, (reduced to focus on the trend of the last 8Qs). OpCF is a negative trend indicating that 3DP has some way to go to achieve sufficient scale that operating leverage shows through.

3DP remains squarely in the position of being yet to demonstrate that it is a sustainable business. There are references to expectations of stronger receipts in Q3 and Q4. Unless we see these materialise, then a capital raise will certainly be required.

I continue to hold, but these are not the results that will lead to me increase my RL position.

Additionally, there was a rather odd Enterprsie Sales update with a promise of the ACV update in February. Traditionally, the Enterprise Sales and ACV update has followed the 4C. The fact that $3DP cannot enter a $ACV number today can only mean that they don't like the number.

Expect an adverse SP reaction today.

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Disc: Held in RL and SM

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Valuation of $0.350
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Added one year ago

Pricing in some significant growth in coming years, the value range for me would be 30c - 40c by my numbers. For me current price (23c) is still factoring in growth but closer to 10%. Definitely more potential upside here.

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#Capital Raise History
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Last edited one year ago

Pointerra Historical Capital Raises - $11.15 raised since IPO market cap today $135.6m at $0.20

·      July 2020 Bevan Slattery Placement/Invests $2.5m at $0.05 per share

·      November 2019 Raises $2.5m at $0.05 per share

·      November 2018 Raises $1.15m at $0.042 per share

·      April 2016 Raised $5m at $0.03 per share Backdoor IPO 

Acquisitions 

·      April 2021 - Airovant $1m Ordinary shares (2,583,092 Shares) in 3DP – US drone-based digital asset management business. https://www.asx.com.au/asxpdf/20210430/pdf/44w0qhn24wwmqc.pdf

Inside Ownership       Ordinary Shares    % 3DP Issued        Net Value at $0.20

Bevan Slattery             45,140,940                  6.66%                          $9.1m

(Capital B Asset Management)

Ian Olson (CEO)           42,814,889                  6.32%                          $8.6m

Neville Bassett            4,732,266                    0.69%                          $946K

Paul Farrell                  3,000,000                    0.44%                          $600K

Total                            95,688,095                  14.12%                       $19.12m

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#AGM Presentation
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Added 2 years ago

Here's the 2022 AGM from Pointerra, that was held yesterday (23/11/22).

https://youtu.be/gtx4Mu3pw7s

Would have loved to have been there if i was in WA. One of the great things about small cap AGMs is that you pretty much have the entire board and management to yourself.

Case in point, Ian said that for this year Pointerra team members outnumbered Shareholders!

Anyway. Nothing really new here, but always good to hear a sermon from Ian.

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#ACV v Cash Flow
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Last edited 2 years ago

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Musings on the already mentioned ACV and Cash receipts.

At Sep22 the light blue bar matches the Dark blue bar from Jun2. Hence Cash Receipts (green bar) is closely resembling the 15m trailing ACV per Q (Light Blue) = Count 5 bars across from one to the other!

If this trend continues, next Q indicates approx. 4.2m in cash receipts; irrespective of additional payments - Storm response?. Interestingly to note that Dec21 Cash receipts were 800k cash flow positive for that Q; wonder if that indicates a lumpy utility payment coming up.

More importantly ... As indicated by the Dark Blue bars - Commencing from Jun21 onwards, Cash receipts will add approx. 700k in aud each Q as a result of the increasing ACV of 2m usd Q on Q. That said I have always wondered if the ACV is padded because of the consistent 2m ACV usd per Q add. But if the cash receipts match the trailing 15m ACV then does the shoe fit???

If 700k is added each Q from here, can Ian spend that much?


PS. ACV in the chart is aud at 0.70 exchange rate

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#ACV update
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Added 2 years ago

Some great commentary already. Similar to others, I think this is a cracker of an update. In terms of my investment thesis -- consistent growth over a long period of time without investing huge sums of money to chase said growth -- everything appears in order here. And similar to you @mikebrisy, my confidence continues to grow, as Pointerra does the same. 

@PinchOfSalt touched on the currency conversion tailwinds at play here. We obviously saw yesterday's 4C update provided in AUD, but when you consider ACV being reported in USD -- totalling more than $US20m -- extrapolate these payments out over the next year or two and you have some serious cash being added to Pointerra's pockets. 

But there is another key bull case argument, which has already been touched on by @mikebrisy, that deserves further highlighting: net revenue retention (NRR). A NRR of 172% YoY is insane. The investment case becomes a different proposition when customers are not only using Pointerra's software, but slowly expanding their offering over a timeframe -- whatever this may be. Your target audience expands from not only new customers, but those already using Pointerra's platform. 

To digress slightly, from all accounts, Pointerra have really hit the ground running with their recent work with FPL during Hurricane Ian. I am going to go out on a limb here and say this is one of the deals we will look back on in five years time and remark how it was company changing. Not only is the market a significant one for 3DP to enter -- think about the countries, towns and municipalities that are impacted by serious weather events, the list is exhaustive and only continues to grow -- but they are starting to enter 'mission critical' status when you are helping agencies respond to natural disasters. The capability of Pointerra3D to ingest data in real time shouldn't be underestimated. Ian mentioned in the recent chat with us that other agencies, similar to FPL, are starting to reach out and ask how 3DP can assist them. I am not surprised. That is powerful 'word of mouth' marketing that doesn't cost Pointerra a cent. But you are also starting to interact with reputable clients that have extensive budgets and a duty of care to the societies they service. Anyone here that has worked in crisis environments -- whether they be emergency response or coordination of resources -- understands the importance of mission critical software. When it genuinely helps the response to life threatening events, it becomes worth its weight in gold.

The main risk here for Pointerra -- who are still relatively small and struggle to attract high-quality sales staff -- is that they spread themselves too thin across multiple verticals/industries. It isn't uncommon to see a strategy like this overwhelm a business and ultimately backfire. With that in mind, their growth since FY20 has been nothing short of remarkable.

dd2b9ce3f211c8b89f92c1e5eb1265523af301.png

All in all, I am really happy with their progress and remain a happy shareholder. I am still looking to add to my holding around the 20c level and they are high up my list to increase my exposure to.

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#Enterprise Sales and ACV Updat
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Added 2 years ago

(As some have speculated ... it was just number 2 on Ian's priority list. Ongoing good progress.)

Net revenue retention is key - existing customers are increasing their use.

Enterprise Sales & ACV Update Highlights:

• Growth in US energy utility sector and expansion across AEC, Transport & Mining sectors drives US$1.9 million uplift in ACV

• ACV now totals US$20.1 million (31 October 2022)

• YoY ACV Growth = 72%, YoY Net Revenue Retention = 172%

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#ACV update
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Added 2 years ago

Agree with @PinchOfSalt. It is frustrating when firms change reporting of regular metrics. It tends to only mean one thing.

Looking back over history, $3DP has been reliable in issuing 4C and ACV Update reports within minutes of each other. However, there is earlier precedent for holding back and issuing later in November 2020.

So, what might be going on? A few ideas. First, there's the obvious - new ACV was poor. Second - there's a new contract imminent and Ian wants to hold off a few days,

We know by his own admission Ian is stretched at the moment without a CFO. So with today the last day to get the 4C out, perhaps he simply prioritised that, and the ACV report is to follow as there is no required timeframe.

Ian doesn't strike me as someone who would withhold a regular report, just because of an inconvenient quarter. On the contrary, given the strong 4C there is every reason to have issued it today. So my money is on 1) prioritising the 4C or 2) an imminent new contract to be included (still, its bad practice to do that.)

Let's see.

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#4C Result
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Added 2 years ago

Adding to @PinchOfSalt 's straw I include my usual 4C trend analysis.

Good receipts last Q. Lumpy nature of receipts is not a surprise given impact of a small number of larger enterprise contracts and track record. Last Q we get the kicker from FPL emergency response, which will not be recurring.

What is recurring are the payments, so SP progression will need to see receipts becoming smoother over time.

Hats off to Ian however, over the long run $3DP is continuing to develop product and customer engagement across multiple verticals while maintaining a low operating and free cash flow burn - some Qs positive some negative, but the long run average c -$200k.

The question from my perspective is whether they achieve a breakthrough in one of the long sales cycle segments, like defence.

Disc: Held in RL (1.2%) and SM (9%)

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#Strawman Meeting Notes
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Added 2 years ago

Ok so a fairly long post but some rough notes from the excellent meeting with Ian. It's not a comprehensive list so check out the meeting if you have the time.

  • In 2020 discussions with Bevan Slattery considered expanding the business model into data capture, not just storage and analysis, but instead, continue to maintain focus on core business where margins are higher and cross border sales are easier. Now data capture companies look to be coming to 3DP to host and manage datasets proactively rather than on demand.
  • Reduction in bitcoin mining operations has reduced the competition and demand on server computation resources.
  • Breaking into the AEC market has been hard as currently digital engineering teams are wedded to the way things have always been done.
  • Jacobs the biggest AEC customer “will be a seven figure ARR contract ‘pretty soon’ and probably beyond that.”
  • Entered the utilities market by chance. Now the opportunity is quite large. In the US there are 200 listed utility companies and circa 2500 state / county owned utilities.
  • The use of 3d data in America compared to Australia is ~100x 
  • PGE spends $35m per annum on lidar and imagery to be able to understand what's happening across the network, previously taking months or up to a year to get the data. 3DP allows that workflow to be reduced significantly. 
  • Sales team working through utilities one by one. By Ian's language it sounded like sometimes these can be hard sells. As evidence of use cases from existing contracts grows this helps to build the sale case. A lot of the utility companies are collaborative and FPL is a big advocate for 3DP, but still need to cross the hurdle of changing the mindsets of how it’s always been done.
  • Ian made the comment that some of the customers believe that 3DP may become a FERC (Federal Energy Regulatory Commission) standard. https://www.ferc.gov/electric
  • On growth of sales vs managing cash flow Ian stated that there is a lot of interest from institutional investors to raise funds to accelerate growth as they have now demonstrated the market and the capital light business model. “What we want to do is become a globally relevant, extremely high growth, high margin subscription business” and sales require cash.
  • Some frustration at the Airovant team leaving but pointed to an example of an opportunity they brought in - Working with Amazon on the automation of their fleets of driverless trucks around distribution centres by hosting digital twins.  
  • During the storm response to Hurricane Ian they met or exceeded all KPIs on the contract which has helped cement trust in the company. Confident that this will lead to being formally added to the storm response solution. Other utilities in adjacent states to Florida have started reaching out.
  • Looking to try to get into real time autonomous data analytics space. Collision avoidance, threat detection etc. See opportunities in analysing the data and selling the outcomes.
  • Restart of trade shows means that they can get in front of customers to educate about 3DPs capabilities.
  • Considers traditional workflow their largest competitor. 
  • Other competitors are focused on one sector, whereas pointerras point of difference is the breadth of use, strength of analytics and business model.
  • Getting good people is an ongoing challenge
  • The $50m ACV target is still considered achievable. Eg. FPL $6-7m per annum fully deployed across the whole enterprise. Enough deals in the pipeline to reach if they secure them
  • ACV vs Revenue. Contract from utility example - win contract, value enters ACV, takes time to get existing and new data to be given to 3DP, time to embed solution into workflow, then can start invoicing.
  • Don’t charge implementation fees, only the subscription fees.
  • Churn at the smaller end contracts $500-$1000/month customers but not with larger contracts
  • Team in Glasgow talking to Network Rail using Sydney Trains as an example.
  • Every Tier 1 miner as a customer - but only at a mine site level. Ian considers this a potential high growth area in the next 12 months.
  • Ian states the Defence sector as the one that excites him the most given the opportunities. But it still needs more work.
  • Partnership with pointfuse to provide AEC solutions. https://pointfuse.com/
  • Recurring theme of struggling with securing good sales team members
  • Expects costs to grow by around 50% in around FY23
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#Meeting
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Added 2 years ago

Epic speed round from Ian. Loved it.

So I was reading on Hot Copper and...

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#Moats
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Added 2 years ago

Impressive Release regarding FPL Storm Response


Within 24 hours of post-storm data acquisition, Pointerra3D change detection analytics of the impacted network across large areas had been cross referenced with weather, imagery, and other supplementary data sources to support accelerated assessment and decision making by FPL storm response teams. Key statistics of the storm response effort included:

• 6 missions flown by FPL aerial LiDAR contractors

• 15Tb of data ingested and analysed by Pointerra3D

• 1,500 AWS cloud machines running in parallel over 5 days

• 18,500 poles modelled

• 1,100 poles identified as requiring remediation and/or replacement

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#Financials
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Added 2 years ago

With an interview scheduled with Ian Olson later today, thought I would share my updated trajectory analysis which depicts 'healthy' progress across the business. 

The disconnect between ACV ( converted to AUD) and Revenue & Receipts continues to get a lot of air time on various media platforms. In trying to rationalize this, a lot of the discussion centres around billing and payment terms and the Company's messaging that due to different payment cycles, they expect this divide to close. Scrutiny of their Avg Debtor days does not point to anything untoward.

My take, which is different, is that we have a Company which is in pursuit of rapid scaling but subject to some interim delays (post contract award) associated with strategically driven customization. Pointerra started with an innovative core capability. They then enhanced the power of analytics, and continue to do so, and more recently they expanded the value proposition to include answers. 

Rapid Scaling ( Market Penetration) & Customization would normally sit on opposing ends of the spectrum (as a contradiction) in any Sales strategy. But in Pointerra's case, the economic dividend comes from reaching that point where the cases and 'fruits' of customization can simply be replicated for new custom. Best example of this would be, following Hurricane Ian, is the tailored solution (the capability) installed at Florida, Power and Light ready for use by any other Utility Company in the USA. "Answers" inside of 48 hours !!

Not suggesting that there are not other contributing factors to the ACV / Revenue divide, but believe that the above plays a material part. @Strawman, maybe you can tease out what really sits behind the disconnect. They repeat the same point each quarter about different payment cycles and it's not gaining any credibility. Should point out that with the recent AUD weakness vs the USD, the currency converted Annual Contract Value, using the last declaration (31 July) now sits at AUD 30m. FY 2022 Sales Revenue AUD 10m.

Getting back to the trajectory analysis, the slide which depicts Revenue per Employee highlights what I regard as a current 'pain point'. Througout the last year we have heard about new hires, the additional resourcing through the Airovant acquisition and yet the the number of full-time employees remains the same at 31. Does this point to employee initiated churn or the fact that the Company is having difficulty finding the right quality of employee (Company initiated churn). I refer you to Ian's comment in the Annual Report under 'Outlook for FY2023'

" Success will likely result if we are able to focus on the biggest drag on growth – identifying, onboarding, nurturing and retaining exceptional people.

The absolute irony of scaling a cloud platform business is a magnified reliance on the need for exceptional people to conceive, build and sell digital twin solutions to our customers and prospects across the Company’s key target market sectors."

Note : All numbers used in the trajectory analysis exclude once off type items of spend plus items such as share based payments etc. Reason for excluding R& D Income and Spend in the one graph is that it provides me with a different and valuable perspective on Financial progress. The Slide which tracks R&D Grants is earmarked for Vertical (x6) Analysis or hopefully Cohort Analysis if and when the Company report these numbers.


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#Inflection Point
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Added 2 years ago

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.

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#Top 20 Shareholders 2022 vs 20
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Added 2 years ago

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Decreased

  • Mr Blaze Jasper (-684,100)
  • Mr Keiran James Slee (-1,055,000)
  • Mr Michael Freeth (-820,540)
  • Capital B Asset Management Pty Ltd (-4,859,060)
  • HSBC Custody Nominees (Aus) Ltd (-78,590)
  • HSBC Custody Nominees (Aus) Ltd REMOVED from 2022 top 20 (held 6,638,112 at 22Sep2021)


Increased

  • BNP Paribas Nominees Pty Ltd (+1,038,514)
  • Citicorp Nominees Pty Ltd (+2,454,225)
  • Mr Hoang Huy Nguyen ADDED to 2022 top 20 (+6,395,241)


Top 20 holdings overall reduced -4,517,422

Shareholders overall reduced from 11,338 (2021) to 10,694 (2022)

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#Financials
stale
Added 2 years ago

Latest report is up.

Nothing unexpected - growth good very small EBITDA loss. On track for a big year FY23 if can sustain current growth.

6A1107332_3DP.pdf

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#Financials
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Added 2 years ago

I was preparing some thoughts on this one and it seems everyone else beat me to it, include @Strawman himself. What a community we've got here!

I think you really valid point @Noddy74 and @Valueinvestor0909 on what appears to be a growing gap between reported ACV and cashflow. 

Incidentally, I remember Claude Walker mentioning this too on The Call a number of months ago as something to monitor. He suggested valuing this company directly on cash receipts; and if we do; it certainly looks more expansive, coming in at a P/S of ~23.

I’ve heard Ian Olson present and get interviewed many times now, and I’m surprised this question never came up. 

They make simple comments on this in their announcements: 

July 2022 Enterprise Sales & ACV Update : 

  • “Revenue recognition and cash generation from these newer contracts continued to emerge during Q4 FY22 and is expected to accelerate into FY23 as further platform deployment milestones are met.”
  • “Importantly, the initial upload of legacy data by new customers (as well as new data provided by 3rd party contractors) to the Pointerra3D platform impacts the Company’s ability to fast-track platform deployment for these new customers, which in turn impacts invoicing and cash generation. This one-off initial drag on deployment in the first year is not expected to continue in subsequent years with the customer.


Essentially, what I’m getting from this is:

  • Customers are slow moving at the onboarding stage.
  • The onboarding stage is also reliant on 3rd party contractors to provide data to upload to their Pointer3D platform. 


If I had to add my perspective from having worked in the software industry for a number of years, here’s a potential dynamic that I think may be happening: 

  1. PointCloud Software is a competitive space. 
  2. To compete, It’s possible that Pointerra are positioning their product with a number of features in their future roadmap to incentise customers to move forward and make the difficult switch from their incumbent. 
  3. In such a scenario, they may request a signed contract from the customer, but no payment upfront. 
  4. Take this with a big grain of salt; this is purely my speculation on what I think may explain the delay. 


This is strawman in the end, so I’ll state my high level thinking: whilst this gap is certainly something to continue to monitor, I’m not worried about it too much. Small companies always need to do things slightly differently to win against the big guys, and no small companies look awesome on all metrics. For the year, they’ve grown ACV at 86%, I think that’s a rather impressive achievement. I certainly don’t think it’s cheap at the moment, but for the long term investor, it’s certainly one to keep an eye on. 

Disc: Held. 

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#Q4 FY22 Update
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Added 2 years ago

The pace of ACV growth remains attractive, with Pointerra adding US$1.9m during the quarter -- pretty much bang on what they've done for the past couple years. That's am 86% uplift over the past year.

If they can retain this pace, they are well on their way to my target of $50m in FY25 sales.

@Noddy74 however makes an excellent point -- the cash receipts just aren't matching up with the reported ACV. For example, at the start of FY22 they had an ACV of A$13m (at the the then FX rate of 73c). Yet over the year they have collected only A$7.8m. Add current cash receivables of A$2.5m and you still fall short by around A$3m or so.

The company did say:


f19a6591ed7aaff505fed06a371104a9ed6005.png

Elsewhere, Pointerra reiterated:

9592fc95d6913182e58182152054f1e6a787f3.png

All of which explains things, to some extent. Perhaps an ARR figure would be better given this phenomenon, but either way these aren't precisely defined metrics and there's a lot of room for discretion.

I don't think anything dodgy is going on, other than the company wanting to present the most favourable metric. At least they have been consistent in the metrics they present. But perhaps I do need to be more cautious in equating ACV to revenue. The good thing is that the 'vector' of sales growth has the right direction and magnitude.

The cash situation is starting to get a little tight. Notwithstanding the variability they mention, the company has around 2-3 quarters left before they run out of cash at the current burn rate. And it's worth noting that R&D and staff costs have all accelerated, and the company said it expects to make additional hires. Plus there's this:

1e9a5172b760460f0c93d315dbaf1cc8f8c297.png

The company reckons the organic growth component can be internally funded, but did say that any acquisitions would be funded by scrip (adding dilution to existing holders). Of course, we should expect increasing staff costs as the company scales, and the real question is not the quantum spent but the return on this investment. Additionally, we should also want to see some operating leverage emerge, whereby revenue growth outpaces the associated cost growth.

I'll let members read the 4C and ACV update themselves, but on balance it's good to see sustained ACV momentum, increased spend from existing customers & increasing inbound enquiries.

The opportunity is there, it's all about execution and effective capital management.

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Valuation of $0.500
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Added 2 years ago

*updating* I'm going to stick with a AUD$50m sales target for FY25. That's an average pace of about 25%pa growth from the current level of ACV. The market opportunity is much larger than this, of course, but scaling the business to that level in the coming years -- especially with difficulties in attracting good devs and sales people -- wont be straightforward. Nevertheless, if they achieve this milestone in the coming years and continue to sustain a high pace of growth, a FY25 price target of 70c isn't hard to conceive. Assuming 720m in shares by then, that'd be 'only' a P/S ~10, or a PE of ~50 (assuming attractive SaaS margins). That's still cheap for a business that would have achieved 10x it's top line in 5 years and be on pace for $100m sales in the medium term. Discounting back by 10%pa gives a current valuation of 52c. Alternatively, perhaps 3DP 'only' achieves 15% compound revenue growth (using current ACV as the baseline) through to FY25, hitting just $38m in sales. We could probably assume something like $4m in NPAT at that point. And at 5x sales, or a PE of roughly 50, the share price would be 26c three years from now. Or 20c when discounted back by 10%pa.

Not great given the current price, but there's some decent asymmetry in these two (admittedly rough) forecasts. On balance, i'm quite optimistic about Pointerra's prospects and think they have the making of a $1b company. But i do need to balance that against the risk of poor execution and slower than expected growth. For now, i'm going with the more bullish assumption. Yes, it's a high pace of growth but it's off a low base, and they have good traction and increasing penetration with good reference clients. Remember too that ACV growth is tracking at about US$8m pa.

4346378e43a23cbd8784312ee6fd9af228a341.png

Let's stay with a 50c fair value -- but acknowledge the true value likely lies 20-30% either side of that.

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## Bull Case
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Added 2 years ago

Jayze87

The R & D Rebate for FY22 should alone take care of that. The question is whether we will be materially EBITDA positive. NPAT positive ??? Be very close IMO.

Whatever the case, strong momentum going into FY23 and believe we will have a stellar year. A 'tipping point' that is sustainable looms.

RobW

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#Bull Case
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Added 2 years ago

@Chagsy, can I ask why? Have you got long term concerns, or does your selling more or less pertain to the current market environment, and this not being ideal for companies like Pointerra?

I ask because my thought process is currently the polar opposite. 3DP were second on my top up list prior to today’s announcement. I think a share price of around 15c is an attractive price, noting their widening moat and the high likelihood of future cash flows being much higher than they currently are. The price activity today doesn’t make this quite as appealing (24% in the green), but we will likely have the opportunity to buy at similar levels in the near future with current market volatility.  

While a minimum of US$500k added is good news in itself, today’s announcement is all about endorsement and validation. I think it speaks volumes that the completion of (both) proof of concepts resulted in the companies – FPL and NextEra Energy, noting their relation – entering into contract/agreement with 3DP. It also speaks to 3DP’s ability to scale. While we don’t have the luxury of looking at the financials, it won’t take many of these deals to cause 3DP’s bottom line to snowball in the right direction – with presumably minimal disruption to overheads. The company note that the new agreements have ‘the potential to be material for this company’. They reported total revenue of AUD3.9m in FY21. These contracts add what was effectively 20% of last year’s revenue – a material amount. This probably speaks more to management’s ambitions than anything else and how they view the company’s potential over the course of the next few years.

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#Ian Olson on Ausbiz
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Added 2 years ago

An interview with Ian Olson from today.

Ignore the idiot at the start (me, not Claude!), but interesting to hear Ian say that the $50m revenue target could be hit a year earlier than I mentioned.

YouTube clip here

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Valuation of $0.200
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Added 2 years ago

How to justify a share price of 0.20cents

April 22 to April 23

Cash Receipts: 16m aud (Q3FY22 ACV 16.26m usd)

Costs: 11m (Q3FY22 costs 2.4m)

NPAT: 3.5m aud

SOI: 700m

PE: 40

Share Price: 0.20


Fast forward to FY26

If ACV growth averages 1.82m usd each quarter from Q3FY22 then Q4 FY25 = 40m usd / 50m aud

Cash Receipts of 50m aud

NPAT: 10.5m aud

SOI: 700m

PE: 40

Share price: 0.6


Average ACV growth (per quarter)

  • 2 year: 1.765m usd
  • 1 year: 2.01m usd


Pros:

  • Pipeline of growth from the difference sectors (Survey & Mapping, AEC, Utilities, Transport, Mining Oil & Gas, Defense & Intelligence)
  • Utilities is driving growth, if another sector begins to impact ACV significantly then it seems 50m ACV is when not if.


Concerns:

  • Cash receipts and ACV disconnect



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Valuation of $0.480
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Added 2 years ago

Valuation maintained based on March 2022 Quarter Activities and Cash Flow Report

Highlights:

• Landmark quarter – concurrently scaling US utility sector deployment across 4 key customers and growing ACV

• Q3 cash receipts A$2.4 million (71% YOY growth v Q3 FY21)

• YTD FYY22 cash receipts A$6.2 million (138% YOY growth v FY21)

• Consecutive cash flow positive quarter from operations (A$0.1 million)

• Business is self-funding organic growth

• Pointerra3D Analytics & Answers driving growth in ACV spend

• New customers added + existing customers grow ACV spend across all market sectors

The quarter was highlighted by step-change adoption in the scale of Pointerra3D platform deployment by US utility customers FPL, PG&E, Entergy & Eversource and reflects the continued development and adoption of the higher-value elements of the Pointerra3D solution portfolio - Analytics and Answers.


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#Use cases
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Added 2 years ago

Thanks @Glutenfree for bringing this recent use case of Pointerra to light. https://youtu.be/jB5EjtTCk38

Diospatial combination of multiple mapping modalities into one digital twin using Pointerra technology is pretty darn cool. You can really get a sense of how 3DPs capability to power and deliver these 3D models can change the way industries function or meta worlds can be powered (maybe ;)

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#H1 Review
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Added 2 years ago

The Good:

Revenue up 104% and ACV up 47% compared to H1FY21 demonstrate that for now Pointerra is maintaining the high growth rate that is expected by the market. The company is also growing across all sectors, not just reliant a few large clients.

Cash flow positive operations in Q2, however I see this staying reasonably flat or even going back into the negative as the company starts to expand internationally. It looks as though management is timing international expansion as cash is set to become available and the product is proven, rather than putting their hand out to investors which is a positive for me at the moment. I think it was on a Baby Giants podcast where this was discussed for another company (forget which one) where they took too long to grow due to funding their own expansion and were overtaken by their competitors, and that is a risk here particularly in the competitive growing sector that they are playing in. Something to watch.

Announced that reporting metrics will be expanded in the future rather than just ACV, which will provide greater insight into segments, customer value and business operations.

The Bad:

Revenue and cash receipts are still lagging contract signings by a long way, so if the company needs to scale quickly to maintain further growth, this may have to be assisted by external funding. Previously Ian has mentioned in the past that they want to be selective with their growth, so this may not be an issue, but one to watch.

What To Watch / Targets:

Opening of office in the US is a big step for the company in being able to provide a more active sales and service to the US customer base, which is currently Pointerra's largest market.

Expanding global operations into the UK, Europe and Middle East. This is also another big step for the company as currently revenue only comes from Australia and the US according the H1 segments breakdown. Having broader exposure to other markets and companies will not only provide a wider market for sales but also provide more insight into a wider range of customer requirements. If implemented correctly this can only help to continue to refine and expand on their data analytics services improving the product overall.

On the lookout for potential acquisitions. I think there could be value here particularly in developing the analytics features but wary of growth by rollups. With only $5m in cash, anything substantial will need a capital raise or issuing of shares as flagged by in the ACV update. So far 3DP haven't ventured to far down this path.

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#Inflation Fears and Debt
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Last edited 2 years ago

One of the risks of small caps and inflation is the cost of debt going up with the interest rate, and this debt forcing them to capital raise or loan even more money! (or go bust)

Does 3DP have debt? According to the latest 4C, it has no debt.

This is a good sign, and ticks off a a reason to invest or stay invested. It means inflation will impact 3DP's supply chain and the sell prices of its own products, but not the debt, because there is none - one less worry to worry about!

It could also mean its at a bargain price right now, as the market sells off on debt fears related to inflation.

16fb12de11db2eb8446f192c927f25934f15f4.png

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#Cash Flows
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Added 2 years ago

A good result from Pointerra today in regard to its Dec 2021 Cash Flow Report.

Hoping to get a good read on ACV in the coming weeks.

Pointerra has just shy of $5m in cash in the bank. Although CF positive in the latest quarter, increasing headcount and development expenses, coupled with the lumpy nature of customer receipts, means a further capital raise is a real possibility (although that's not a terrible thing if they can use that to underpin accelerated ACV growth).

To get a better sense of the cash flow picture, I've plotted out the results since the Dec18 quarter. Overall, an encouraging picture.

ba8d6404dd12d9a10bf9e1d47f3679cbacd409.png

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#Q2 - Activities and Cash Flow
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Added 2 years ago

December 2021 Quarter Activities and Cash Flow Report

Highlights:

  • Record quarterly cash receipts from customers A$2.85m, up from 0.98m.
  • Cash flow positive quarter from operations A$0.80m.
  • Material contracts (between A$4.33 million and A$6.60 million) in the US energy utilities sector, in addition to new customers added
  • New customers added in the AEC, Survey and Mapping, Transport and Mining, Oil and Gas sectors.

Perhaps predictably, Q2 was a great quarter for 3DP. The biggest criticism in 3DP’s journey – in my opinion – has been the delay in which it receives cash receipts. Well, they have delivered a record quarter in terms of cash receipts received and announced material wins in the US energy utilities sector (as announced 14 Dec 2021). They are trending in the right direction and its clear there remains serious demand for their services – which is benefiting their cash flow.

490894db43a57eb52b863252de34dea3fea030.png

We also received an update re: 3DP’s ongoing collaboration with the Defence and Intelligence sector:

‘Subsequent partnerships with these agencies to lodge joint applications for rapid funding rounds via the US Federal Government’s Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs also progressed during the quarter.’

Sounds promising. They are clearly looking to generate short-term funding to create a pathway to larger, more significant contracts/utilisation of 3DP’s platform. Government discussions are never easy – they are long, with various levels of red tape to overcome – but once an agency adopts a platform, subsequent contracts are sticky, valuable and worth their weight in gold. This won’t happen overnight, but I have no reason to doubt 3DP in executing. This sector in particular is where I think the magic will happen for 3DP - and is the reason I am invested in the company. That said, the positive inroads 3DP continues to make in other sectors provides additional substance and support to my investment thesis.

DISC: HELD

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#Bull Case
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Added 3 years ago

My view on Pointerra following the recent ACV announcement. I believe the announcement is a game-changer for the following three reasons:

  1. ETR is the one big material announcement we all have been waiting for since the PG&N and EverSource negotiations. Its show how large individual contract could get. Granted, not all of the current contract amount is going towards ACV, the expectation is the ACV contribution from ETR will be even larger when the service is rolled out to all business units. I am expecting similar large contract awards from other utilities in the future. The recent devastation caused by hurricanes and tornadoes will only speed up the intake.
  2.  The speed at which ETR was onboarded is noteworthy. This is a reflection of the readiness of our product to meet the requirements of the utility sector. This has been a relatively long process. But with their experiences from PG&E and EverSource, the company is in a much better space to land material contracts in a short period of time.
  3.  The comments in the outlook section suggest that the company is relatively happy with their position in the utility sector and now are focussing on other sectors, which the company believes to be equally big. Biden’s infrastructure bill is only going to provide further impetus to all these other sectors to take up services like what Pointerra has to offer.


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#website
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Added 3 years ago

So Pointerra is just playing with us now! New tonight to the website.

https://www.pointerra.com/industries/defense-intelligence/


“I see Pointerra as a force multiplier for the modern warfighter. The ability to execute rapid operational assessments based on highly accurate 3D data and analytics has greatly improved organizational responsiveness to critical points of need.”

United States Army LTC Nicholas Roukas, Battalion Commander 1-151 IN, 76th BDE

There is a problem... Pointerra has the solution!

Hell two swim up bars! Let's go all out!

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#Future contracts?
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Added 3 years ago

#Hyperone #Pointerramakesitsmark #Pointerragrowth #Pointerralidarunderwater #Jobs #Tryingtopieceitalltogether

Alright, big day for Pointerra. Great news and a hearty well done to the Pointerra team. Ian, I think you still deserve that Xmas card. The turn-around time from POC to utility contract highlighted in today’s announcement was impressive, from October to December. Well down for streamlining this process.  

Further diversification in contract areas will be key for the company moving forward at the super speed pace that I am hoping for as an investor. 

There is a lot of scuttlebutt going on around Hyperone. Linked In is currently advertising for 2 GIS officers– which is exciting. 

As I have eluded to on several posts (Nearmap stuff too), I get a little bit excited about researching the mapping space. I recently heard the most fascinating podcast about the blue dot and how this is created on our phones. The interviewer of the podcast, linked below, spoke with the head of the geospatial mapping department at google, Ed Parson’s https://mapscaping.com/blogs/the-mapscaping-podcast/where-does-the-blue-dot-come-from. Wow if you don’t know how this tech works do yourself a favour and listen. Mind blown! 

I digress, so what has this to do with Pointerra and Hyperone and future business growth for the company? I am just trying to piece it all together as a novice who just finds this stuff fun!

 So what is Hyperone? I needed to get my head around it.

This is the illustrious Bevan Slattery’s baby – yes the same Bevan Slattery that helped cement 3DP on the microcap map. 

“HyperOne delivers a new hyperscale national fibre backbone that will significantly boost digital capacity across Australia to support investment in future industries including aerospace, AI/machine learning, cloud, satellite, defense, resources, agriculture and renewable energy.” (Hyperone Website,2021)

The vision of this ambitious project is accessibility across Australia. No matter where you are across the country there is cable that can provide 10,000 terabit per second of digital info to your doorstep. I love the equality of this project. Anyone who has lived in regional or remote Australia can appreciate how this will change lives. We can’t leave it all to Elon’s Starlink. 

How is this good for Australia?

“This 20,000km+ network will generate more than 10,000+ jobs during construction and enable tens of thousands more jobs in future industries. HyperOne unlocks significant opportunities for investment in regional and remote communities that have historically lacked access to world class digital infrastructure.”(Hyperone website 2021)

 IT news states reference: (https://www.itnews.com.au/news/hyperone-starts-to-build-2300km-diverse-fibre-loop-on-east-coast-573989)

The cable will have three layers of protection including a termite-protected sheath, rodent-protected inner sheath and a non-metallic armouring to provide even more protection from Australia’s harsh soil conditions,” Slattery said.

“HyperOne will not only be Australia’s first hyperscale backbone, but also Australia’s first 100 percent ducted or armoured backbone.”


?What I find interesting!

“HyperOne, however, is also aiming to bolster Australia’s position as a major interconnection point for international sea cables transiting from Europe, via the Middle East, to Western Australia and through to Hong Kong, the United States, and even Antarctica.” 

With the current geopolitical instability in the region, there is unprecedented opportunity for Australia to become the region’s leading, secure, and stable hub for future industries and jobs,” Slattery said.

The same IT news article states:

According to Nicholls, “Subsea fibres have four forms of geopolitical instability challenges [in the Indo-Pacific].”

“One is delay. For example, it takes weeks to get permission to repair cables in Indonesian waters. The second is piracy, which is a high risk when cables are relatively shallow in areas such as the Malacca Sea. The third is changing territorial claims, mostly found in the South China Sea. And the fourth is extraterritorial reach,” he said.

“HyperOne could help commercial operators bypass all these risks.”

So what I have learnt from this article (I was today years old when I discovered this) is that a total of 380 undersea cables drive the Internet. This is precarious and vulnerable to spying and international tension issues. But everything including voice and data passes along these underground highways every day. AMAZING!

I don’t know about the rest of the Strawman community but I live on Signal and formerly What’s app (no thank you Mark Zuckerberg I don’t want you to own or to listen in to my hilarious texts or conversations). I use these cables daily to stay in touch with family and friends overseas. I am so grateful for these cables but I am also a little miffed about how poor signals have been and how frequently my internet calls drop out when I call my sister who lives in the US. 

Why does this matter? What is she talking about?

So back to the GIS officer’s being hired for those Hyperone jobs: 

·      The GIS officer is responsible for creating and managing all spatial products across Hyperone assets including: maps, map layers, visualisations, data management, ensure land property and environmental assets are accurate, maintain spatial systems and data, services requests etc…

·      We are looking for experience in fibre optic telecommunications with terrestrial and SUBMARINE knowledge being an advantage. 

OK so you will notice a highlighted word. My immediate thought process is how the hell do people lay underwater cable? This is obviously pretty important you know for the internet and telecommunications. 

So I asked a much smarter friend about this. He is a special effects mathematician for the movie industry. Whenever I am struggling to understand things I ask “Luke”. We all have a “Luke” or a "Sarah" etc… You know those smarter people that can offer insight we just don’t see. 

Specifically I asked him whether LIDAR point clouds were useful for rendering cities in his animation work or gaming? 

His answer:

ABSOLUTELY!

He has frequently used LIDAR pointclouds on his work in the movies I won’t name drop but very cool – movies about magicians going to school, rings, whether or not to take a blue or red pill. He sent a bunch of very cool examples through – movie magic is now dead to me. 

So the issues with LIDAR is that the registration of points can be tricky! – Back to Ed Parson’s and his blue dot podcast – see it all comes together! He makes this point too. 

But here is the kicker, the icing on the cake my Ah Ha moment as a simpleton stitching this together……LIDAR can be really useful for UNDERWATER scans where traditional imaging is IMPOSSIBLE. 

So LIDAR for cable laying underwater and maintenance underwater– who does point cloud processing fast like no other company to help with these mammoth projects? Who enables maintenance on utilities and infrastructure like nobody's business? Starts with Point ends with Erra. 

Cheers

Nnyck777

Interested in others thoughts on Hyperone! I might be drawing a long bow.

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#Material contract award
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Added 3 years ago

Pointerra's announcement today of an additional ~AUD$5m in contracts has been very well received by the market -- adding around $60m to the company's market value (at time of writing).

That seems a lot given the total value of the contracts, although there are a few points to bear in mind.

Firstly, while AUD$5m is small biscuits, these deals alone represent more than the company's entire top line in FY21 ($3.98m).

In terms of the Annualised Contact Value (ACV), which was last reported at US$11.7m in October, we should see a significant boost. Pointerra has also won a range of smaller contracts not yet reported, but even excluding these the Q2 ACV is likely to be at least US$16m -- a 130% jump on the previous corresponding quarter.

Also, two of the announced contracts were from existing customers. It not only helps reinforce the value proposition of Pointerra's products, but given the scale of these customers it helps underline the growth potential as these solutions are expanded across their networks.

Indeed, the largest contract announced today was with Entergy -- a US$21b utility company with US$12b in annual revenue. This first contract is just a foot in the door, and there's a lot of scope to expand the offering here too.

All of these clients now serve as attractive reference sites to help facilitate future sales.

With shares now trading on a trailing Price to sales of 70, the company seems ludicrously priced. But given the very low base of revenue, the high pace of growth, and the potential for the business to scale rapidly, it's not difficult to imagine Pointerra reporting $50m in sales in the medium term, and retaining a high sales multiple.

For reference, similar('ish) stocks went from $4m to $50m revenue in about 3-6 years (very roughly, and some thanks to acquisitions). And at that point all managed to attract rather elevated P/S ratios.

2d55179acd6464a1161313371deaa196b328be.png

It makes valuation quite difficult, and a lot depends on execution. The team (and costs) will definitely need to expand a lot in the coming years. Nevertheless, the business has (in my mind) all the makings of a $1 billion-plus company in the next 5-10 years.

disc. held

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Valuation of $0.360
stale
Added 3 years ago

Valuation $0.36

Assuming Pointerra can continue to scale, assuming they can reach $50m revenue in 5 years’ time (Average Growth Rate 65% plus). Revenue currently growing off Low base (FY21 ~$4m).

Assuming Share Count Growth 855,000,000. Large discount rate applied due uncertainly/ increase margin safety if future growth turns out to slower. 

Bought Today in RL at $0.36, look to add again if it was dip under $0.30.

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#Seeking Alpha article
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Added 3 years ago

Link below:

https://www.google.com/amp/s/seekingalpha.com/amp/article/4472386-pointerra-growth-on-track

This is authored by the same pair that did the recent podcast with Managing Director Ian Olsen.

Thesis remains in tact, but I'd really like to see a reduction in the time it takes 3DP to collect cash from customers.

Disc: held

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#Podcast interview
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Added 3 years ago

For those interested in getting into the nitty gritty of labeling and AI and use cases for LIDAR and AI this is a great podcast ep. Malory Dodd from Imerit discusses the space and from 43 mins discusses companies who are applying this tech in the utilities space - no naming of Pointerra but clearly we know they are involved.


https://podcasts.google.com/feed/aHR0cHM6Ly9tYXBzY2FwaW5nLnBvZGJlYW4uY29tL2ZlZWQueG1s/episode/bWFwc2NhcGluZy5wb2RiZWFuLmNvbS82MWNlYzUwNy0wZTc0LTM1YTYtYmIwMi0xM2VjYWU2OTQ2OGE?sa=X&ved=0CAYQkfYCahcKEwjwrKart5T0AhUAAAAAHQAAAAAQAg&hl=en-AU

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#Podcast interview
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Added 3 years ago

@Nnyck777 Thanks for the podcast interesting that Ian said he thinks they will be listing on the NASDAQ in the next few years...

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#Valuation
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Last edited 3 years ago

The Salesforce analogy. Ian certainly thought this was appropriate. What if we are all being way too conservative using our DCFs. What if this really is fundamentally changing the workflow of major sectors (6verticals). Maybe that $250 million will be reached super quickly, especially if they are talking 8 figures for defense contracts. Interesting!


b214e958e48205a348383794b489137244f03f.png

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#Podcast interview
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Last edited 3 years ago

Another great interview with Ian Olsen. He talks about how short sighted the market is and how much SP is underestimating 3DPs mass future growth and earning potential. He re-iterates $50 Million then $100 -$200 million ACV goal. Also discusses future potential listing on NASDAQ and emphasizes companies MOAT and lack of direct competitors.


https://open.spotify.com/episode/2aQgQwGalwfPEKkAUDFzoJ?si=2658e72ee8f9486f

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#Management
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Added 3 years ago

Just got to watching the 8 Oct presentation. Ian is correct about the utilities industry; they are glacially slow to change, and I know a whole bunch of those guys that he talked about that designed the system in paper and it still operates that way. The industry has operated in the same manner for a century.

But…the industry is now about to change, and they have no option. First the traditional generation methods are no long the most cost effective, renewables are eating their lunch, albeit with grid stability considerations. The other problem for them is the paper design guy, and they are almost exclusively guys in this industry, are all, and I mean each and every one of them is about to retire. This is a massive issue for the industry here in Australia, as well as in North America and Europe. 

These will play in to aiding the business with the sales push back. He is right people buy from people. When the people change, I think they will get a better reception. 

The competition is real, however, this industry also expects to buy from someone that is there to support them long term. Ian is correct that the solution is sticky, once you are in these companies you are potentially there for decades. 

 

 

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#Corporate Presentation
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Added 3 years ago

New Corporate Presentation showing today at the ASX Small and Mid-Cap Conference

Corporate Presentation 14 Sept 2021

On the face of it, no new data on contracts, but some more detail on use cases and "customer examples".

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Valuation of $0.390
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Added 3 years ago
Simplified 5yr DCF at 100% growth with 5% discount and 3x terminal value. 678mil shares on issue. Note to self: 1. tech company 2. picks and shovels - the data analysis is agnostic of how the 3d data set was captured. 3. capital light - no collection costs like NEA 4. advised by founder/CEO of NEA during creation in 2015.
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#Sep Monthly Meeting
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Added 3 years ago

I really appreciated the frankness Ian Olson spoke with at the September monthly meeting.  It felt like he could of spoken for the full 2 hours of the meeting and still had more to say.  I've never really done a deepdive into 3DP as I missed it's run up last year and a fairly cursory overview suggested the valuation was pretty full.  But it's come back a long way from there and had another 12 months to execute.  It might be time to have a bit more of a look at this one...

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#Valuation
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Added 3 years ago

I have attached a pic of my standard analysis of cash flows and ACV from the quarterly 4Cs for 3DP by way of pre-reading for those Members who don't do this analysis themselves.

The gentle upward trend in FCF show promising signs of early operating leverage. So the question is how much effort is it taking to grow ACV? At this stage we'd want to see growth from existing customers as well as new customer adds.

We cannot expect any material disclosures at a meeting such as we are having, however, I think some questions getting at how the pipeline is progressing and what the sales cycle looks like in terms of effort, customisation and time frames might be helpful.

Basically, for 3DP to progress in valuation, it has to both materially advance ACV while growing operating leverage. (Note that it is currently on a EV/Revenue of around 50, with 10-20 the norm for high growth SaaS, as I understand).

If it doesn't do these, then we will continue to see retail investors who got all excited by the catalyst of Bevan Slattery investing heading for the doors, and we'll see the current SP downtrend continue. While I could care less what traders do, as a long term investor I do want to be assured on the two strategic value drivers I've identified. 

Questions that get at that would be worth spending some time on, I think.

I've decided not to value 3DP. I like the tech, the strategy, the emerging economics, and it is a "spec buy" in my portfolio IRL.

Disc: Held on SM and IRL

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#FY22 Outlook Notes
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Added 3 years ago

Pointerra rarely gives much in terms of business forecasts or specifics around business development so taking a look through the end of year report for things to watch over the coming periods and in preparation for Ian’s visit to Strawman.

 

It sounds like the new integrations of Asset & Risk Explorer are having some positive uptake with the existing Utility customers with further POC contracts. It is mentioned these are also paid trials which are unlikely to contribute much to overall ACV but cover the sales exercise. Working with a large construction company, I have seen how much time and effort it takes to roll out new systems across all operating regions, sometimes taking years from initial integration to business wide use. So far it appears that there has been positive uptake from the large Utility contracts, which I expect will continue to grow as the Pointerra system is deployed further across their businesses.

 

The digital twins system established for mining business are being rolled out in the US, which expands the market for this. I will watch the uptake on this, and if they start to develop further analytic solutions for the models. (K2Fly buyout/ integration?) There are plenty of other applications for digital twin models, however there is a lot of competition in this space, so it would be interesting to hear from Ian what they identify as 3DPs particular differentiators.

 

The biggest takeaway I got from this announcement was the POC for a warehousing facilities management / autonomous vehicle navigation solution. This is a new space for 3DP and a rapidly growing sector globally. This is definitely one to watch progress of.

 

The MOU with Advanced Mobility Analytic Group sounds like it is fairly early at this stage, but reiterates how Pointerra is expanding use cases for their applications. My takeaway from this is that with this expansion, to deliver for their customers Pointerra is likely going to have to continue the employee growth in FY22. (Reported headcount increase of 12 to 29 in FY21)

 

There are a lot of exciting prospects for 3DP over the next year and it will be interesting to watch how they play out.

 

Disclosure: Held

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#asx announcement
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Last edited 3 years ago

Preliminary Final Report - Strong momentum - Future facing 

- Cash balance up 121%

 - ACV up 241%

 - Customer revenue up 224%

 

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02414907-6A1047969?access_token=83ff96335c2d45a094df02a206a39ff4

 

 

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#Management
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Added 3 years ago

Started my journey to Mt Mordor with 3DP this morning. (metaphor for lots of research)

Read the latest listed announcement on the ASX.

A minor perhaps unimportant observation, but one for me that suggests astute management is on the last page.

Rather than the obligatory one paragraph on "what we do", 3DP have short FAQ, with what I assume is trying to explain their tech company to the hordes of non-technical people in the world.

I like it. Bravo 3DP. Make your story clear and understandable by all.

//// pasted from report:

Common Q&A’s about Pointerra:
1. What do we do? We manage, analyze and monetize other people’s 3D data for them to solve
a broad range of digital asset management problems across multiple sectors.
2. How do we make money? People pay us to manage their data, to develop or source analytics
to make sense of their data and they even share revenue with us when we help them to monetize
their data.
3. Why do people need us? 3D data is hard to manage, use, analyze and share. We have
proprietary (patent protected) IP that enables us to do what we do better than anyone else by
generating significant workflow, accuracy and insight outcomes from 3D data.
4. Do we have competitors? There are lots of desktop solutions for 3D data and fewer cloud
solutions. Most cloud solutions focus on visualization but the 3D data isn’t readily analyzed – either
quickly and efficiently or at mass scale. Our IP allows us to do this better than anyone else – faster,
with more accuracy and at lower cost.
5. Who are our customers? Anyone who is engaged in capturing (surveyors, drone operators, aerial
and satellite mapping) or using (AEC sector, asset owners/operators/insurers/regulators) 3D data
to plan, design, construct/build, operate, maintain, insure and govern/regulate a physical asset.
6. What sectors do our customers operate in? Linear infrastructure
(road/rail/pipeline/transmission/distribution), non-process infrastructure (civil and built-form),
process infrastructure (mining/oil & gas/industrial manufacturing plant) and defense/intelligence.
7. How much do people pay us? Our Data as a Service (DaaS) solution to manage 3D data using
our digital asset management platform is priced based on the amount of data we are hosting
and the number of users each customer requires. We also charge customers to process their
data (Data Processing as a Service or DPaaS), build/deploy analytics (Analytics as a Service or
AaaS) to interpret their 3D data and, where we connect buyers and sellers of 3D data, we
typically agree a revenue share via our 3D data marketplace – www.3Dinsight.ai.

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## Review of 4 C and ACV / Mark
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Added 3 years ago

Review of Pointerra's latest 4c and ACV & Market Update

Key Takeout

* ACV reported as USD 9.8m (translates to AUD 13.2 m, a whopping 224% above the Total Customer Receipts for FY 2021). Signals what will eventually find it's way to the Income Statement.

* The Airovant acquisition contributed to an uplift in the declared ACV. Declared Annual Turnover expressed as an Avg over past three years muddies the waters. Anybody's guess what the carry is. All about Resources, IP and shared vision IMO.

* The stand-out in the narrative

...." Whereas ACV growth throughout CY 2020 had been dominated by the US Utilities & Mapping sectors, the past two Quarters (H2 FY21) has seen broader adoption of Pointerra's solution across most sectors and also reflects investment by the Company in new BD and Sales Resources focused outside the Utilities and Mapping sectors"

All adds to the Growth story and will further underpin momentum going forward.

* Successful completion of the platform evaluation by Eversource Energy and now moving into full enterprise deployment. A year ago, the Company spoke of the prospect of contracts ( 7 digit). Eversource clearly would be such a prospect. Believe the Company have shifted to a 'land & expand' model, so IMO we can look forward to a material increase in platform usage by Eversource ( similar to the build of Rev via P, G & E as witnessed this past year).

* The launch of Pointerra's Utility Explorer (including Asset Explorer and Risk Explorer) demonstrates the extension of the value proposition. The provision of enhanced Business Intelligence which simplifies interpretation , facilities risk identification and supports decision making not only creates competitive advantage but will support Customer Retention. Talks to all levels in the Customer organisation aimed at steering decision making. 

* During the QTR, the Company had it's first win with 3 D Insights. Ian Olson is on record as saying that '3 D Insight' could grow to become bigger than the Pointerra as we know it today.

And now to the numbers...

* Cash Receipts for FY2021 reported as AUD 4.071 m, where

  - H2 FY 2021 127% higher than H1

  - Employee related expenses in FY 2021 likely to lift to 70+ % of Total Operating Expenses ( 63.1 % for FY 2020)

  - Despite an increase in Full-time employees Year-on-Year from 12 to 26, Total Cash outflowsfor FY 2021 came in below AUD 5 m ( increased by 52.4% YOY, but a mere 6.3% when comparing H2 vs H1). This signals attention to cost containment or better described as a 'measured approach' to cost management.

* As the Pointerra accounting structure is uncomplicated, where Income is dominated by Sales Revenue and R & D rebates / Govt Grants and OPEX is dominated by Employee expenses and R & D expenses, using that gleaned in the recently issued 4 C may serve as useful indicator of what income will be declared later this month (FY Financials).

A 'Quick & Dirty' formula of 

Sales Revenue less Receivables should 'near' equal Customer Receipts.

Given that Receipts increased 127 % in H2 vs H1, think we can safely assume the Receivables number for FY 2021 will come in north of AUD 0.8m. The Customer receipts were reported as AUD 4.071 m. Equates to a Sales Revenue number of AUD 4.871 m .

* Pointerra currently achieve a Gross Margin above 90%. Looking at the increased investment in R & D during FY 2021, expect the rebate number will be north of AUD 0.8m 

This puts us firmly in EBITDA neutrality or EBITDA profitability territory. What a base when you consider the latest ACV number, the new avenues to add to the ACV number.

In closing, we have one Risk which has surfaced and needs to be monitored. Pointerra has followed a Partner route to support growth. Believe Aerometrix were such a partner a year back. Watched a podcast recently where Mark Deuter, CEO of Aerometrix indicated they are building out their core platform of data capture to include data processing and data analytics. So an in-house AI Analytics capability.

Competition will inevitably arrive in various forms. Pointerra have patents and are still building their IP. Huge market for many to succeed, so nothing more a case of monitoring.

There is another ' Operational Leverage' story about to unfold

Rob W

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#Exponential Growth - or lack t
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Added 3 years ago

As noted in Rapstar's latest update on Pointerra, growth decelerated last quarter. A single quarter of reduced growth wont matter a whole lot if it subsequently bounces back to the previous run rate of ~25%.

My concern with 3DP was that it is nearly profitable, with 2 cashflow +ve quarters. Far too early in it's journey.

I have attached a couple of graphs (I wish I could insert images into the body of the text)

The first shows how for SaaS companies, the faster the onboarding of new clients the greater the cash burn, and less profitable a company is - in the short term. A good thing. So seeing SaaS companies have a high cash burn early in their life is usually a good thing. But following the graphs a couple of years out tells a very different story.

The second graph shows what I feel represents the disillusionment of early investors in SaaS companies, as they see their loss making company slowly tilt towards being cash flow +ve, only next quarter to see them become increasingly unprofitable. They often throw the towel in and sell out at this point. Hotcopper forums are filled with haters crowing about SaaS companies never becoming profitable and using this phenomenon as their proof. But this is exactly what management should be doing. They should be hiring more sales staff to really ramp up even though this increases losses in the short term.

Applying this back to Pointerra, it is of concern to see a only a couple of hires announced in their most recent commentary, though they do say more appointments are coming. I am hoping they will include not just geeks but salesmen and women and we will then see a big uptick in the number of new customers.

To see this company fulfill its potential it is going to have to adopt a new skill set - sales. 

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#Q4 2021 Enterprise Update
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Last edited 3 years ago

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. 

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#Risks
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Added 3 years ago

Fallen to $0.415 today.  Almost as low as when I bought this, even after decent news.

Opinions?  

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#Acquisition
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Last edited 3 years ago

Airovant seems to be value enhancing (complimentary as Pointerra has the platform, Airovant has an analytics-based solution approach, also Pointerra is 3D focussed, Airovant more 2D focussed) but has not been price enhancing – herein lies the opportunity?

Airovant provides customer ‘solutions’ via data analysis and insights for risk, compliance, and optimisation of physical infrastructure.

Pointerra has had 3 broad strategies historically – 1) 3D Data storage and retrieval, 2) 3D Data analytics, and 3) 3D Data Marketplace.

From inception, the 3DP platform appears to have been optimised for data storage & retrieval, being cloud native. The ‘3D data marketplace’ was and still seems to be a longer-term aspiration.  So the analytics has likely been a recent area of focus for Pointerra – most probably led by customer feedback. So Airovant seems to be a ‘buy vs build’ solution to plug this analytics value add gap.

This is probably why Ian Olson refers to Airovant as being ‘solution focussed’. It should allow the combined entity to be more value enhancing for clients than just a 3D data storage and retrieval facility.

If this is correct, it’s a vertical integration of sorts that takes the data mining (client data source) to storage and retrieval (Pointerra today) to data processing into information (using Airovant functionality) to solve bigger customer problems.

If this works, it is likely to lead to broader use cases and deeper customer penetration / stickiness if the analytics component can be better delivered by Pointerra.

Risks - I would expect some potentially significant integration risk because: 1) Pointerra haven't done an acquisition before and 2) their complementary nature (2D solutions vs 3D platform) might not be very plug and play. 

Disc: Held

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## Financial Outlook - Pointerr
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Added 3 years ago

Afternoon All

Herewith an extract following a bit of analysis on Pointerra (originally shared on HC), which may be of interest to some.

Whilst the market has regarded the latest ACV update as disappointing, there is IMO a lot to be excited about. Few will knock Pointerra as lacking 'growth' potential. The conversation is all about Valuation. I suspect had the ACV come in north of USD 8.5 m, all would have been good. Up until the end of January,  ACV was  'front and centre' in terms of depicting the growth, with quarterly cash receipts somewhat lagging. The recent quarterly showed somewhat of a reversal with a step-change in Receipts and a slower increase in ACV vs the previous quarters.

This analysis is based on ACV remaining the lead indicator.
Not sure how many are considering the likely Full Year 2021  result ( 30 th June FY close a mere 7 weeks away).I believe we now have enough information to extrapolate both the likely Income, likely Expenses and arrive at a rough estimate on EBITDA for FY21. 

Herewith some key ratios which to my mind support the fact that we are fast approaching a key inflection point which embraces growth in INCOME , growth in capability (with a corresponding expansion of SPEND) which should result in sustained investor confidence wrt financial performance.

Note : Period of Analysis spanning FY18, FY19, FY20, H1FY21 (see below)

Income (incl. R&D Rebates) : AUD 0.84m > AUD 0.936m > AUD 1.92m > AUD 1.594m (6 months)

Gross Profit : AUD 0.786m > AUD 0.907m > AUD 1.774m > AUD 1.463m (6 months)
. Note : Gross Margin consistently above 92%

Expenses : AUD 2.319m > AUD 2.749m > AUD 3.505m > AUD 2.472m (6 months)

EBITDA : - AUD 1.533 > - AUD 1.842m > - AUD 1.731m > - AUD 0.878m (6 months)

R&D Rebates/Grants as % of Income : 62.8% > 52.6% > 36.0 % > Not yet declared

Employee Expenses as a % of Total Expenses : 60.7% > 64.5% > 85.5% > 68.3% (6 months)

 

Deferred Revenue : AUD 0 > AUD 0.283m > AUD 0.811m > AUD 0.653m (6 months)

Note : Whilst not associated in any way with ACV or EBITDA near term, values becoming material for any longer term projections

*******

Time to get back on point. Together with the knowledge that the Company has and will continue to increase it's headcount in support of growing sales and that Employee Costs dwarf all other expense items, a casual look at the trajectories (see above) on Income & Spend would suggest reaching EBITDA neutrality is highly unlikely in the near term.

Companies all use different measures to provide confidence on Future growth in Financial Terms. Contracted ARR would be considered the 'holy grail'. Total Contract Value (TCV) provides contractual certainty but the waters are often muddied by variability on contract duration.

Pointerra have chosen to use Annual Contract Value (ACV) which is generally not backed by a contractual commitment, but rather Pointerra's assessment of customers who reliably present as continuous users of the platform (via agreement opposed to contract). I suggest you refer to Pointerra's response to the ASX query back in February. The Company provided a framework which reflects the discipline/s applied in determining what can be considered as true ACV. 

Now let's have a deeper look at the likely EBITDA number in the FY 2021 Financials.

The EXPENSES came in at AUD 2.472m for the HY. We know the Company are hiring, so let's apply a 50% increase to the H1 spend, that is for H2. Equates to a FY est. of AUD 6.18m (an increase of 76.3% over FY 2020).

Looking at the INCOME  side of the equation, we have already banked AUD 1.594 m at the HY, with a Gross Profit of AUD 1.463 m. Rather than think of the HY on HY growth as a % in order to arrive at FY est., let's go the 'FACT' route IRO announced ACV and relevant reporting in H2, which is material (and certain). All designed to be conservative. 

On the 26 Nov 2020, the Company declared the new ACV number as USD 5.82 m. On the 29 Jan 2021, they increased the ACV number to USD 6.88m. So, let's say USD 6 m at the HY. Using an ER of 0.75, translates to AUD 8 m. Let's apply half of a year equivalent for H2 ie AUD 4 m. At 93% Gross Margin, we have a gross profit of AUD 3.72 m.

Now add the H1 Gross Profit of AUD 1.463 m and our theoretical Gross Profit number as an estimate for the Full Year lifts to AUD 5.183 m.

Not finished. We know that PG&E have increased their spend from USD 35 K pcm to USD 80 K pcm, reported end Jan 2021. Assuming ramp up to new level took a while, let's only count 4 months in the Half Year. Therefore, USD 180 K ( translates to AUD 240 K). Equates a Gross Profit of AUD 223 K.

And the last addition. The Eversource paid 'Proof of Concept' trial would not have been counted in any ACV declarations (given the disciplines on ACV determination). Reported as USD 600 k spanning four months. Let's trim that to 3 months to again faciltate any delays. So, USD 450 K which converts to Income of AUD 600 K with a Gross Profit of AUD 558 K.

Now add up the Gross Profit and guess what, we are up at AUD 5.96 m

In theory AUD 220 K short of EBITDA neutrality, this essentially without counting the impact of any ACV updates released in H2 of this FY (except for the increase in Spend by PG&E). So,  no provision for the annual R &  D Rebates which will be claimed 30 June ( likely to be well north of AUD 700 K), any new business and/ or any expansion of use by existing customers.

Interestingly, if you have a look at the prior depreciation and amortization + the intangible asset balance entering FY21, the road to Profitability (before Tax ) may arrive sooner than we can imagine.

This is already a book, but I think it is important to realise that we wont necessarily have a cash cow from H2 CY 2021 and beyond. The hiring will continue with headcount likely to exceed 40 come Calendar year end. I trust that Pointerra will be measured in terms of beefing out the capability (Spend) ensuring that it produces a very satisfactory and timeous ROI via commensurate Gross Profit.

Based on the above, confident we will be EBITDA positive @ 30 June, that is for the Full Year FY2021. If not, I may be under-estimating the costs associated with increased hiring  OR would present a question on the integrity of the declared ACV. 

I invite / welcome comments on any flaws in the logic and of course, any other comments. Someone once said to me................

..." anchoring your thoughts on the prevailing share price is bad for your health". In light of the above, cannot think of a better time to ignore the market reaction. The spoils are IMO just around the corner. 

As always, please DYOR, Rokewa

 

Rob W

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#Q321 Enterprise Sales
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Added 3 years ago

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.  

 

 

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#RaaS on 3DP (report)
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Added 3 years ago

22-Apr-2021 RaaS (Research as a Service) "Flash Comment" on 3DP attached.

View Attachment

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#Q3 2021 Cashflow Report
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Added 3 years ago

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.  

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#HY21 Results
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Added 3 years ago

Pointerra saw ACV growth of 139% for the six months through to Dec 2021, and now sits at US$6.88m. Revenue was $1.56m for the half, up 218% off a very low base. Cashreceipts were up 132% to $1.14m.

Growth was driven by new customers and an increased spend by existing customers. 

Impressive numbers, but then for a business valued at over half a billion dollars, they'd need to be. For context, that's a pro-rata price to sales of ~180x, and a price to ACV of 64x (Share price at 83c and AUD @ US79c).

It lost close to $1m for the half in net profit, with around -$800k in free cash flow. There's $4.5m cash in the bank -- hopefully enough to get to breakeven. They were profitable on a ACV run rate basis as of the latest quarter.

But to generate enough sales and deliver enough implementations to sustain the rapid growth required to justify the current valuation, the headcount will surely need to grow further. It added 8 new employees in the half, and now sits at 20 full time equivalents -- but that's still tiny.

The company also announced a soft launch of its 3D data marketplace, and hopefully that will provide another good source of revenue. It's seems clear they have an attractive offering and great sales traction overall.

Not much "colour" was added to the results in terms of management commentary, and the ACV number had already been released in January. So overall my view remains this is an exciting company for which I see big things -- but that most of the market seems to have well and truly noticed this too. A lot of growth is already factored in to the current market price.

The asymmetry I try and look for in potential investments (much more upside than downside), just doesnt seem apparent. So for better or worse, although i retain a small parcel, I'm not a buyer at current prices.

If I had a large holding, i'd be tempted to lock in some profits. Even if there is some more upside, the better part of the gain has surely been realised (then again, I said that at much lower levels...)

ASX results here

 

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#Q2 results
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Added 3 years ago

Pointerra continues to grow its ACV at a solid rate, rising US$1.95m or 40% in the 3 months from September 30, 2020. That's an 18% increase since they last reported this metric on November 25 and ACV now stands at US$6.88m.

Sales came from new and existing customers, with US utilities and mapping sectors driving much of the growth. Pacific Gas and Electric alone is being onvoiced US$35k/month and that's expected to increase to US$80k/month as the deployment continues.

Pointerra also spoke of new opportunities in the defense space, and was invited to demo its capabilities across a range of US departments. Early days, but there's good potential here. 

Pointerra reminded investors that the timing of customer receipts would be lumpy as new clients are onboarded and due to the different payment cycles at play.

Investments in new people and ongoing R&D efforts helped keep the business cash flow negative, with $635k in customer receipts (compared to $610k in preceeding qtr) and $578k in government grants being offset by ~$1.4m in expenses, yielding an operating cash outflow of $231k. That being said, on a ACV run rate basis, the business is profitable.

The business has $4.5m in cash left at the bank. Barring a material ramp up in costs, it should be able to avoid another capital raise.

You can read the 4C and company update on the ASX at these links.

It's very satisfying to watch the early thesis unfold. However, as much as my confidemce in the company has been strengthened, I remain concerned by the valuation. 3DP is trading at 36x ACV. Yes, ACV is at a relatively low base and has the potential to grow strongly for many years, but a lot of optimism is priced in.

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#Eneterprise Sales Update - Nov
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Added 4 years ago

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.  

 

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#Nov 2020 ACV update
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Last edited 4 years ago

Pointerra has reported a US$0.89m increase in ACV since October 15. ACV now stands at US$5.82m.

This was due to a combination of new sales, plus an increasing spend from existing customers -- though none were individually significant.

The 18% lift over 40 days is very decent. If you annualise this, it translates to an annual increase in ACV of around US$8m.

Shares are on a Price to ACV multiple of ~45 -- which is certainly up there. What's tricky is that that will drop very rapidly if the pace of ACV growth is mainatined.

EG, Assuming ACV of USD$14m this time next year, and assuming the share price is around current levels, the P/ACV ratio drops to ~18.

You can read the update here

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#Hiring Initiatives
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Added 4 years ago

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. 

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#August 2020 Sales Update
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Added 4 years ago

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.    

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#July 2020 Sales Update
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Added 4 years ago

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.  

 

 

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#Q4 2020 Cash Flow report
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Last edited 4 years ago

UPDATED (thanks @RobW)

Pointerra'a 4th quarter report was encouraging.

Cash receipts grew 55% to $0.82m from the preceeding quarter, and up 290% from the same quarter last year. This was due to an increasing spend from existing customers and the addition of new customers. Pointerra again told investors to expect lumpy cash receipts due to the timing and nature of customer invoicing.

The business was cash flow positive, in the black by $220k for the quarter (and down $800k for the year). This was however aided by a $120k grant from the US govt. as part of covid stimulus measures.

Importantly, a number of enterprise proof of concepts were progressed, the most important being Pacific Gas & Electric. Both parties are working towards a full commercial agreement -- one that will make PG&E Pointerra's largest customer and "have a material impact on CV growth."

Further large enterprise contracts are expected in the coming quarters.

Pointerra also announced plans to partner with Accenture's global energy consulting team. This will hopefully prove to be a valuable channel (although likely at a lower margin).

Interestingly, the business is looking at expanding into a 3D data marketplace for the film & television sectors. Given the growing use of Computer Generated Images (CGI) in this industry, there could be a decent niche area that Pointerra can exploit without much added investment.

With $2.4m in cash at the end of the quarter, and the recemt $2.5m investment from Bevan Slattery, Pointerra has close to $5m in the bank. Although much of this will be used to expand resources, given some large contracts on the horizon and the business hopefully remaining cash flow positive (on average), any further capital raise seems unlikely.

Quite happy with this. No word on ACV, but that's expected before the end of July, as well as more detail on enterprise sales.

What makes it hard of course is that shares are on roughly 30 times the pro-rata Q4 cash receipts. But the thing is that it only takes a few big deals to really swing the dial, given we are working off an extremely low base. If they land PG&E as well as Florida Power & Light (for example), ACV could double on that alone.

So while it seems overly generous to ascribe high double-digits growth rates when doing valuations, it's certainly not implausible. In my experience, it's best not to get too fussy with price when sales are on a J-curve (just watch the underlying business like a hawk to ensure that is indeed what's happening).

ASX annoucement here

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#Q1 2021 Quarterly Update
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Added 4 years ago

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.   

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#Cap raise & New Investor
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Last edited 4 years ago

UPDATED

Pointerra has issued 50m new shares at 5c each to raise $2.5m. It's a bit disappointing given they said only a few months back that they weren't likely to raise additional cash.

Nevertheless, there are some positives here.

The obvious one is that the balance sheet is in a much stronger position, and based on prior commentary from management this should easily see them through to cash flow positive.

Next, the issue price of 5c is a good premium to the average market price over the past 3-4 months.

Finally, and perhaps most interestingly, the shares were sold to Bevan Slattery -- someone with deep experience and success in tech companies. With this transaction, he holds 7.5% of Pointerra.

Slattery founded Pipe Networks in 2002 and sold that to TPG for $373m in 2010. He also founded Megaport (ASX:MP1), up 7x since listing.

See below for his experience (from Wikipedia).

ASX announcement here

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#Q3 2020 Update
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Added 4 years ago

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

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#Q3 2020 Results & Update
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Last edited 4 years ago

Pointerra have reported results for the 3 months ending March 31, 2020.

  • Record quarter of cash receipts, which came in at $530k
  • ACV grew 17% to $3.32m
    • (there was a 4.6% FX boost here due to a more favourable exchange rate. On a constant currency basis, ACV would have grown 11.7%)
  • If ACV growth continues, the company should be cash flow positive by Q4 2020 
  • COVID-19 has accelerated inquiries and accelerated adoption from existing customers
  • COVID-19 has had no impact on service delivery
  • Cash balance is $2.2m at quarter's end (compared with $2.5m three months ago)

As @Rapstar has noted, there is a real disconnect between the quoted ACV figure and quarterly cash from customers. It's understandable that there would be a delay as customers are onboarded, invoiced and paid, and different payment cycles can make it difficult too -- but the lag is meaningful. For example, the ACV from Q1 (Sep 30 2020)  would suggest cash receipts of $0.6m for the latest quarter (6 months later), 13% above the reported figure.

All in all, a decent result. And very encouraging that cash flow breakeven is on the horizon. If they can sustain sales momentum, the current share price will be looked back on as quite cheap. 

You can read the quarterly 4C here, and the Enterprise sales update here

 

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#Market Update
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Added 4 years ago

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.  

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#COVID-19 Update
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Last edited 4 years ago

Pointerra released an operations and outlook announcement in regard to the COVID-19 outbreak.

Key points:

  • Except for HQ, all staff worked from home previously anyway, and the current lockdowns arent expected to prevent the business from conducting operations.
  • Pointerra has seen an increase in customer numbers and spend (although no specifics given on these numbers)
  • Cash receipts are expected to be "more than double" that of the previous quarter ($0.18m). That being said, last quarters cash flows are a low base for comparison (a major client was forced to defer payment as it recapitalised), as cash receipts were down 42% in Q2 compared to Q1.
  • Due to the increased need to work remotely, Pointerra has said it had "experienced a noticeable acceleration in bith interets and adoption of the company's cloud-based 3D digital asset management platform"
  • In the past week, Pointerra has signed 3 seperate paid proof of concept agreements with existing prospects. These were all large clients and the gareements are intended to "prove-up a rapid enterprise deployment"
  • Over the weekend, the company completed a task order for its major client precision hawk, who has apparently committed to the continuing use of pointerra's platform.
  • The company says cash recipts and cash balance "should remove the requirement for any additional external capital".

The company will be holding a shareholder webinar briefing on March 27. Details in the announcement, here.

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#H1 2020 report
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Added 4 years ago

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.  

 

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Valuation of $0.035
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Added 4 years ago
Feb2020 Updating to 3.5c * ACV update below expectations, cash conversion poor. Key customer risk with Precision Hawk (expect re-negotiated contracts) * Staff costs growing faster than anticipated. And new hires flagged. * Expect further capital raises / dilution. Further from cash-flow break even than I previously modelled 31-Oct: Updating (previously 5.4c) to include my estimate of the September sales update and new data processing income. Based on a simple DCF. Major assumptions: * Revenue growth of $2.4m p.a. (add $0.6m per quarter) for 5 years. I think this is achievable given revenue currently growing at ~$0.4m per quarter. New sales hires, conversion of existing prospects and growth of existing customers should make $2.4m p.a. possible. Another way of thinking of this is adding 10 to 15 new Enterprise customers per annum. * Gross margin 80% (this is a guess. Can't find what AWS costs are...) * Overheads (R&D, corporate costs etc) stay pretty flat at $2.8m p.a. * Allowing 10% dilution for a small capital raise Note: I don't think this is how it will play out. I think excess cash after break even will be ploughed into sales and R&D. I'm ok with this, I trust management to allocate wisely and get a good ROIC. I'm just building a simplified model to get a rough valuation
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Valuation of $0.045
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Added 4 years ago
Assuming 400k / quarter growth of ACV for 3 years, 580million shares and a final 4 x ACV multiple discounted at 10% per year.
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#FY20 Q2 results
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Added 4 years ago

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....

   

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#FY20 Q2 results
stale
Last edited 4 years ago

Cash receipts of  only $0.18m, down from $0.31m in first quarter. This was due to their major US customer, PrecisionHawk, working through a restructure and recapitalsiation, which delayed some work for a large mutual client in Florida. 

Cash outflow increased due to added US staff hires. Quarterly costs are just shy of $1m, and the company has only $2.5m in cash. And this is after the capital raise last year. The company is looking at making additional hires in the current quarter, so expect costs to rise again.

Unless cash receipts materially increase, the company will need to pass the hat around again to remian a going concern. I think it very likely we'll see another capital raise or two before breakeven is reached.

To be fair, 3DP has previously advised that cash receitps will be very lumpy in the short to medium term, due to a variety of different payment terms, and as new customers are onboarded.  And that makes sense given how small the business is and the breadth of its client base. But it does make it very difficult for an outsider to gauge the "trend growth" in revenues/cash receipts. It also highlights concentration risks (eg. if precisionhawk go under, they will lose a major source of revenue)

The company reported ACV of $2.84m as of January 31 (although for some reason they always plot the ACV value for the quarter based on what it was a month after each quarter ends. Seems a bit rich..

At any rate, if we assume that's just due to the precisionhawk delay, it's an incremental gain of $430k for the quarter, and has cast doubt on my initial assumption of hitting $5m in ACV by the end of FY20.

Pointerra highlighted some larger contracts. The partnership with precisionhawk to provide inspection services to Florida Power & Light is expected to "significant and incremental" ongoing revenue throughout this year and next, with another 48 inspection task orders contracted. Each of these order total around $1m, but it's not clear what % of this is for pointerra.

The company was also approached by Major League Baseball (MLB) to assist in vizualistion efforts of MLB stadiums. MLB is expected to formerly adopt the pointerra paltform in April/March of this year and is also expected to generate "significant" revenue. Although again, that's very vague.

The deal with an unnamed US mapping customer, announced in Sepetember 2019, has now commenced. It helped contribute to the latest quarters ACV growth, but in total is expected to generate more than $600k in ACV when complete (although when that is likely to be was not disclosed). Pointerra said that there was potential for similar contracts with other US states, and that at least one was expected to commit to the platform in the current quarter.

R&D remains a major expense item, with company on an annual run rate of >$1m in related expenses. Partly this seems due to the need to create bespoke solutions at the request of clients, and while these new feautres will have broader appeal, it shows that the offering is still far from comprehensive.  

All told, I remain of the view that this is still an early stage, high risk business. There's definitely huge potential, but how well the opportunity is exploited, and how effectively costs are managed remains to be seen. Even under optimistic assumptions, profitability is a good ways off, so this is very much a story that will take years to play out. In the meantime, expect huge volatility.

4C statement here, Enterprise sales update here

 

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