Strong Year for 8 Common: A Closer Look at Their Financial Position
It's evident that 8 Common has had a strong year. This is now ‘common’ information.
Their ability to execute on closed contracts is commendable and instills confidence in their prospects for the upcoming year.
However, while the overall outlook appears positive, I maintain a sense of prudence with these guys. Specifically looking at cash reserves.
It's worth noting their significant improvement in cash management and their efforts to reassure investors with statements like:
"With a growing user base and heightened activity, alongside reduced development and implementation costs related to the GovERP technology startup, our company anticipates moving towards positive cash flow in FY24. With over $1.8 million in cash on hand, we remain fully equipped to drive this growth."
Yet, I’m still not 100% sold on the ‘fully equipped’ dream.
Why? 2 things:
- What transpired in Q4 cannot be simply annualised; government customers tend to pay predominantly in the fourth quarter. Hence, it's plausible to anticipate more quarters with cash burn, and it wouldn't be unreasonable for them to consider raising funds once again to ensure a more secure path towards sustainable cash flow.
- They’ve done it in the past.
Holders, am I missing anything? Who’s got a differing opinions on this matter?
