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

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

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

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

@Slomo interesting announcement.

However, I believe a sale on any inside knowledge is illegal. (Others will correct me if I am wrong.)

He is not a director or executive and, therefore, not a formal insider, so far as I know. However, given his very high profile historical association with $3DP, it would be a very unwise thing to make such a sale if it were based on any inside knowledge, because presumably questions might be asked. This is even more the case given the high profile of the ongoing with-holding of the ACV report.

I'd prefer to be more generous and assume that he has independently formed a view that it is game over for $3DP and that he needs the money elsewhere.

As you say, a big vote of confidence in buying $MP1 shares would be nice. :-)

Disc: Held RL and SM

$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.

Disc: Held in RL and SM

(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%

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.

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%)

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".

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