$ARX announced their 4C this morning.

4C Report

While no longer a holder, because I have a significant holding in $PNV I continue to follow $ARX for insights on the other firms working in the dermal repair space. (Also $IART) But to clarify, for many indications these firms are not direct competitors, but they are playing in the same general space.

Their Highlights (I've selected only the more significant, as its a LONG list)

Financial Highlights

• Strong ~20% increase in quarter-on-quarter cash receipts from customers, to NZ$17.7 million.

• Continued quarter-on-quarter progress towards breakeven operational cashflows, with net cash outflows from operations decreasing to NZ$1.7 million from $3.2 million in the prior quarter.

• Net cash outflows from investing activities of NZ$1.1 million for the quarter, reflecting further investment into additional manufacturing plant & equipment capacity.

• Strong cash balance of NZ$30.5 million as at 31 December 2023, and the Company is debtfree.

Updated FY24 Full-Year Guidance

• Guidance reduced to NZ$67-70 million total revenue, NZ$66-69 million product revenue, 85% product gross margin and a normalised EBITDA1 loss of NZ$1-3 million.

• One-off (H2 FY24) decrease in expected revenue from TELA Bio, Inc. (‘TELA Bio’) due to a previous overestimation of AROA’s revenue share (non-cash) on inventory supplied to TELA Bio and a delay to a joint product development project. OviTex™3 and OviTex PRS remain on a strong growth trajectory.

• Robust Myriad™ sales performance, with 10% growth in Myriad active accounts from Q2 to Q3, comparable field sales productivity and a revised forecast of 70-85% year-on-year growth (full-year).

Operational Highlights

• US FDA (‘FDA’) 510(k) clearance received for a new product, a resorbable dental barrier developed and manufactured from the Company’s proprietary AROA ECM™ platform technology. The Company is actively pursuing a new partnership to commercialise this product.

• The FDA has reviewed AROA’s 510(k) application for Myriad Flow™, a new soft tissue regeneration product that could be commercialised in combination with Enivo™, and requested additional pre-clinical and clinical data to support a clearance. Both studies appear to be less complex than anticipated with regulatory clearances expected within 24 months.

• To date, six patients (n=10) enrolled in the pilot clinical study for Enivo, AROA’s new tissue apposition platform technology, have undergone a unilateral mastectomy and completed followup care, with no clinically relevant seroma or complications reported.

• 36 patients enrolled in AROA’s Myriad Augmented Soft Tissue Regeneration Registry (‘MASTRR’) during the quarter, taking the total number of participants to 268 (n=300). 

•Enrolments in AROA’s multi-center Symphony™ randomised control trial approximately doubled during the quarter, with a total of 86 participants enrolled to date (n=120).

My Analysis

I'll keep it brief, with the cash flow trend analysis below telling its own story.

From my perspective, my thesis that this is not looking like an investible business is continuing to be supported with each quarter.

While you might think an 85% gross margin gives you a lot to play with on the expense side, the fact is that medical devices and pharma is a tough gig. The high costs of sales and marketing together with the ongoing and necessary burn of development expenditure quickly eats up the profit.

Despite the management key messages, there is no discernible trend towards operating or free cash generation. In 24 months we've seen cash shrink from $65m to $35m, with the last Q burning about $3.5m.

$ARX has some good technology, and they are using it to develop multiple platforms with many indications, evidenced by their continuing clinical program. However, the fact appears to be that none is making material headway into the ostensibly large addressible market.

Perhaps management are taking a longer term view? However, your view cannot be too long term. Competitor innovation means that products necessarily have a finite life cycle. At some point, you have to have a product that generates serious cash, and I can't see where this is coming from at $ARX. And if they continue to burn cash at the current rate, in about another 2 years time they'll be raising again. Its not an imminent issue, but with the trend it may be unavoidable unless something changes.

$ARX is playing in a competitive market. 20% top line annual growth won't cut it, and it highlights just how strong $PNV is with >90% GM and >60% topline growth now pushing $100m, enabled by a more focused product suite.

Disc: Not held in RL or SM

Kiwi dermal repair company $ARX issued its 4C report today. I didn't attend the call, but the report is very detailed. I haven't held $ARX for some time, but still follow it (along with $AVH and $IART) to better understand the space in which my core holding $PNV competes. As I said, the report is very detailed, so I am only reproducing their financial highlights, we there is nothing very standout operationally.

Their Financial Highlights

• Increased cash receipts from customers of NZ$15.2 million during the quarter, compared to receipts of NZ$12.3 million for the prior quarter.

• In line with expectations, net cash outflow from operations of NZ$4.8 million for the quarter, compared to the prior quarter outflow of NZ$1.9 million. This primarily reflected typical postfinancial year payments and a planned operating loss for the quarter. Net cash outflow from investing activities was NZ$1.3 million for the quarter, reflecting further investment into additional manufacturing plant & equipment capacity.

• Strong cash balance of NZ$38.5 million as at 30 June 2023.

• FY24 product revenue guidance maintained at NZ$72-75 million (25-30% increase on FY23 on a constant currency basis ).

• FY24 product gross margin guidance maintained at 85%.

• FY24 normalised EBITDA profit guidance maintained at NZ$1-2 million

My Analysis

Overall, there are no surprises that I can see from a quick read of the results - all aspects of guidance are maintained.

I have updated my usual CF analysis below, showing the last 8Q trends.

While receipts are on a clear uptrend, so are costs. In fact, both OpCF and FCF are on a slight negative trend.

With closing cash of NZ$38.5m, the balance sheet is strong. However, it is important to note that the since capital was last raised in 3Q22, over the 7 quarters since, the average cash burn has been NZ$3.8m per quarter.

Yet again there are reports about investment in expanding facilities. Evidence that these biologics are both more capital intensive and lower margin than synthetic BTM.

Of course Gross Margin is only one element. The release also provides some detail about the number of sales reps with sales greater than NZ$750,000 p.a. Interesting to note that DW and $PNV sets his sights on the higher A$1m for their top salesmen - a significantly stronger contribution margin. Just anecdotal, but interesting to me anyway.

My Key Take Aways

I took the decision to exit $ARX in June 2021 because of my clinical bias towards synthetics, the stronger growth rate of $PNV, and its higher margin. Over the last two years, while $ARX is sustaining top line growth, there is no sign of sustainable - let alone attractive - economics.

Bottom line, this looks like a good product with a growing number of indications, variants and clinical supporting evidence, but not a business.

According to Tradingview, the company is covered by 5 analysis with PTs ranging from A$1.325 - A$1.635, vs. todays A$0.90. It's on a much lower revenue multiple than its sector peers, however, with no trend towards favourable economics it probably deserves its current value and I don't understand where the 5 analysts are coming from.

With economics like this, it won't be bringing any pricing pressure to bear in its sector anytime soon. Which is good news for $PNV.

Disc: Not held

Some SM members are already familiar with ARX, some are not. In short ARX are a NZ based company that produces sheet wound products for hernias, chronic wounds, traumas etc. Product is made from the forestomach of sheep. It has a market cap of around $340m and they have been going for about 14 years and have been listed on the ASX for nearly 3 years.

 The CEO Brian Ward started the company and owns about 10%. Annual sales to the 31/3/23 were $62m. It lost $1.7m and had operating cash outflow of $3.7m. For the first time this year time some of the R&D was capitalised - $1.3m versus $10.6m that was expensed. Still very conservative accounting.

Looks highly likely will turn cash flow positive in the 2024 year. It has around $45m in cash, so is not going to go broke.

 The focus is on US sales so there are lots of issues in getting this happening around sales teams, surgeon acceptance, contracts with healthcare providers and product reimbursement.   There is a lot in the presentation material released on the 1/6/23 -  much of it you have to take their word for it, unless you are an industry insider.   

However a clearer picture of this company is emerging:

• Their product appeared superior in certain applications
• Their products are cheaper than the existing biologic mesh’s on the market. (It is a crowded market with pig and human tissue products, as well as fully synthetic products)
• The management all have their working lives and money locked into it and are pushing it very hard.  You cannot say they are not trying.
• They are not going to go broke

 What is further convincing however is if you take out their R&D for their new product Envio (a product that fills up dead space inside a wound cavity, a way off getting to market) they are $8.5m EBITA positive. So you could argue this is a medical device company is already profitable selling roughly on a PE of about 80. Still no one substantive (read sizable Fund Manager) at the present time will touch it.  All too scared.  Hence the current share price drift.   

The next 12 months will be critical, however it is not beyond possibility with demonstrated recurring sales and earnings growth ARX could well double in the next three years.  If not the downside should be limited, due to the established sales position, IP and earnings.   

I think the odds are currently in the investor’s favour, and it is a BUY

$ARX reported their 1H FY23 Results. Continue good progress on all fronts. No surprises given 4C updates. Upgraded guidance for FY23 is maintained.

I observe that over the last 6 months a few more fundies have started to notice and indicated they are doing research on it.

With a cash balance of $50m, the cash burn for the half of <$7m is not a concern, as i continues to fall.

Their highlights.

Financial Highlights

• H1 FY23 Product sales were up 44% to NZ$28.8 million compared to H1 FY22 (NZ$20.1 million), and up 20% compared to H2 FY22 (NZ$24.0 million), on a constant currency basis.

• Product gross margin % of 84%, representing a 6% increase compared to H1 FY22, and a 5% increase compared to H2 FY22, on a constant currency basis.

• Total reported H1 FY23 revenue inclusive of project fees was NZ$29.3 million.

• H1 FY23 Myriad™ product revenue grew 242% on H1 FY22 and 147% on H2 FY22 (on a constant currency basis) to NZ$5.6m million.

• H1 FY23 normalised EBITDA (unaudited) was positive.

• Upgraded FY23 guidance maintained at NZ$62-64 million.

• Strong cash balance of NZ$50.1 million as at 30 September 2022 and the Company is debt free.

Operational Highlights

• The Company continues to gather clinical evidence, including publication of a pre-clinical study demonstrating the potential of AROA’s new Enivo™ system, as well as ongoing recruitment of patients for the Myriad Augmented Soft Tissue Regeneration Registry.

• On 4th November, the Company submitted an application for regulatory approval to the US Food & Drug Administration (‘FDA’) for the first product in the Enivo range.

• The Company is planning a full launch of Symphony™ in April 2023 and expects to be well-positioned for pending reimbursement changes.

• Regulatory approval for Myriad Matrix™ in the Australian market was gained in September.

• Seasoned Medtech Executive and long-time entrepreneur Dr. Catherine Mohr joined AROA’s Board on 1 November as a Non-Executive Director.

• Due to headcount growth, additional office space has been secured in Auckland, New Zealand.

Disc: Held in RL and SM

AROA Biosurgery Half Yearly Results H1 FY23

Soft tissue regeneration company Aroa Biosurgery Limited (ASX: ARX) is pleased to announce its full results for the first half of the 2023 financial year, which ended on September 2022

Highlights are listed below. To read the full announcement

AROA CEO Dr Brian Ward and CFO James Agnew are hosting an investor webinar today at 11:00 AEST to discuss these results                                            

• Financial HighlightsH1 FY23 Product sales were up 44% to NZ$28.8 million compared to H1 FY22 (NZ$20.1 million), and up 20% compared to H2 FY22 (NZ$24.0 million), on a constant currency basis
• Product gross margin % of 84%, representing a 6% increase compared to H1 FY22, and a 5% increase compared to H2 FY22, on a constant currency basis
• Total reported H1 FY23 revenue inclusive of project fees was NZ$29.3 million
• H1 FY23 Myriad product revenue grew 242% on H1 FY22 and 147% on H2 FY22 (on a constant currency basis) to NZ$5.6m million
• H1 FY23 normalised EBITDA (unaudited) was positive
• Upgraded FY23 guidance maintained at NZ$62-64 million
• Strong cash balance of NZ$50.1 million as at 30 September 2022 and the Company is debt free

• Operational HighlightsThe Company continues to gather clinical evidence, including publication of a pre-clinical study demonstrating the potential of AROA’s new Enivo system, as well as ongoing recruitment of patients for the Myriad Augmented Soft Tissue Regeneration Registry
• On 4^th November, the Company submitted an application for regulatory approval to the US Food & Drug Administration (‘FDA’) for the first product in the Enivo range
• The Company is planning a full launch of Symphony in April 2023 and expects to be well-positioned for pending reimbursement changes
• Regulatory approval for Myriad Matrix in the Australian market was gained in September
• Seasoned Medtech Executive and long-time entrepreneur Dr. Catherine Mohr joined AROA’s Board on 1 November as a Non-Executive Director
• Due to headcount growth, additional office space has been secured in Auckland, New Zealand

https://newswire.iguana2.com/af5f4d73c1a54a33/arx.asx/2A1408343/ARX_September_2022_Quarterly_Report_and_Appendix_4C

$ARX reported their 4C and due to their reporting cycle gave partial unaudited results for 1H23.

Their reported highlights:

Financial Highlights Q2 FY23

• Cash receipts of NZ$11.0 million received from customers during the quarter.

• Net cash flow outflow from operations of NZ$4.3 million for the quarter.

• Net cash outflow from investing activities was NZ$1.2 million for the quarter, reflecting AROA’s investment into additional manufacturing plant and equipment capacity.

• AROA ended the quarter with a strong cash balance of NZ$50.1 million as at 30 September 2022

Financial Highlights H1 FY23

• H1 FY23 product revenue (unaudited) grew 44% on H1 FY22 and 20% on H2 FY22 (on a constant currency1 basis) to NZ$28.8 million. H1 FY23 total revenue (unaudited), inclusive of project fees was NZ$29.3 million.

• H1 FY23 product gross margin (unaudited) was 84%.

• H1 FY23 Myriad™ product revenue (unaudited) grew 242% on H1 FY22 and 147% on H2 FY22 (on a constant currency basis) to NZ$5.6m million.

• H1 FY23 normalised2 EBITDA (unaudited) was positive.

Upgraded Guidance FY23

• Guidance upgraded to reflect AROA’s improved FY23 performance expectations including significant movement in the actual US$/NZ$ exchange rate.

• Total revenue guidance for FY23 of NZ$62-64 million (including NZ$2 million of project and license fees) on the revised constant currency basis (up 39-43% on FY22 on a constant currency basis). Previous product revenue guidance (on prior exchange rate) was NZ$51-55 million.

• FY23 guidance for product gross margin upgraded to 84% on the revised constant currency basis.

• FY23 normalised EBITDA expected to be approximately breakeven. 

My Key takeaways

Overall, a weaker cash performance (see graph below), however, the Q-on-Q receipts tend to be very lumpy, so not reading too much into this one result. No concerns on liquidity given cash position, overall growth trend and strong %GM.

1H23 GM of 84% is a positive vs. FY22 of 76% and previous forecast FY23 of 77%. However, this is also an FX beneficiary.

Myriad accelerating its growth albeit off a low base.

Upgrade is a positive, however most of the headline impact is due to a FX impact (US$0.62=$NZ1 from US$0.70=$NZ1). Still, positive.

The operational report is largely positive, including a modest upgrade from partner Telebio.

Overall happy with this and expect a modest positive reponse.

Disc: Held in RL (1.3%) and SM (5.4%) - held mainly as an alternative ASX read on $PNV market

September Quarterly Results Webinar 

Soft tissue regeneration company Aroa Biosurgery Limited (ASX: ARX)) is pleased to announce that it will hold a webinar with CEO Brian Ward and CFO James Agnew on Tuesday 25 October at 1.00pm AEDT to discuss the September Quarterly Results which will be released pre-market the same day

Investors and interested parties can register for the webinar via the following link:

https://us02web.zoom.us/webinar/register/WN_vIDjJfx5QWmoIBNdbohrnA

Investors can submit questions prior to the webinar to shinsley@aroabio.com or do so via the Q&A functions on Zoom

https://newswire.iguana2.com/af5f4d73c1a54a33/arx.asx/2A1389983/ARX_CEO_Presentation_AGM

I attended the $ARX virtual AGM yesterday. The CEO's presentation gives a good overview of the company's progress. As in the case of $PNV, it is expanding rapidly driven by USA market support by a rapidly expanding category and growing surgeons awareness. The presentation provides a good overview of their current portfolio and development work.

There was nothing exceptional to report other than the following which I found interesting.

CEO Brian Ward was asked in Q&A how $ARX were finding things competing with $PNV, which is also expanding rapidly in the USA. Somewhat suprising for me, Brian said (and I paraphrase) that $ARX doesn't see $PNV as a competitor. They believe $PNV is more focused on burns whereas $ARX is more focused on dermal repair (incl. DFU) and reconstruction. He also said that he believes that biologics have clear advantages in deeper dermal repair where certain properties of biologics (indicated in the presentation) promote the healing process. Brian believes Integra is actually more of a competitor to them.

For those of us who follow both what Brian and David Williams say, they are somewhat at odds with each other: witness 1) yesterday's announcement of $PNV DFU clinical trial and 2) DW's reports of surgeons innovating and using BTM in a wider range of applications. As you'd expect DW also promotes the superior properties of synthetics in reducing risks of infection and rejection.

Now, I am not an expert, but I suspect (and perhaps other StrawPeople are better-informed) that both sets of comparisons lack a factual clinical foundation because, to date, the clinical studies are being referenced to the current standard of care and not comparing the different novel therapies head-to-head? It will be interesting if one day someone does a may comparative study.

At this stage, I am not concerned because of the large TAM and expanding category. There is room for both. I find holding and following both deepens my understanding of the sector.

Disc: both $ARX and $PNV held IRL and on SM.

https://newswire.iguana2.com/af5f4d73c1a54a33/arx.asx/2A1386915/ARX_June_Quarterly_Report_and_Appendix_4C

Aroa Biosurgery reported Quarterly Results today. In this straw I'll post first the company's own highlights and then some of my own reflections on the results following the very brief 15minute call this morning with the CEO and CFO. (Not many instos or fundies following this).

Top line summary: Good progress, no surprises either way. Need to keep an eye on margins. HOLD

Highlights

• Cash receipts of NZ$13.9 million from customers during the quarter.

• Net cash flow outflow from operations of only NZ$0.2 million for the quarter, down from NZ$5.1 million in the previous quarter.

• Net cash outflow from investing activities was NZ$1.1 million for the quarter, reflecting AROA’s investment into additional manufacturing plant & equipment capacity.

• AROA ended the quarter with a strong cash balance of NZ$55.4 million as at 30 June 2022.

• FY23 product revenue guidance maintained at NZ$51-55 million1 (up 30%-40% on a constant currency basis on FY22).

• Improving US sales performance with 95 Myriad™ active accounts at the end of Q1 FY23 (a 32% increase on the previous quarter) and two representatives with a current average run rate of over US$850,000 per annum.

• Progress is tracking well for AROA’s ENIVO™ range of dead space management products, with submission to the US Food & Drug Administration for the first product planned in December 2022.

• All participants in AROA’s Symphony™ pilot clinical study (n=10) have completed treatment. Work is underway to set up a randomized controlled trial evaluating Symphony in the treatment of 120 non-healing diabetic foot ulcers in the US.

• Progress is also tracking well on AROA’s Myriad Registry study, the Company’s largest prospective study with 48 patients enrolled to date. 

My observations

Good results in line with guidance. Don't get excited about the step up in receipts and stepdown on cash outflow over the prior Q - this was flagged last quarter as due to a delay in key payments, which have been included in the quarter. A pity this was not quantifed - I should have asked!

Staff and corporate costs have increased quite sharply although there tends to be Q-o-Q noise around the growth trend. CEO said they are seeing some inflation, but they still expect to see margin expansion through this year due to sales mix tending towards a higher proportion of the higher margin MYRIAD product.

Steadily growing the US sales force, although expect to be behind their planned numbers. CEO said this was because they are focusing on salesforce productivity, but I sensed some awkwardness on this so I don't know if there is any underlying staff churn or recruiting challenges in a tight market - neither was mentioned.

Indicated they are pleased to be getting $850k sales from their top agents. (This is well behind $PNV and their saleforce is about 50% the size of PNV).

As shown in the 4C trend graph below over 8Qs, $ARX is not yet showing operating leverage, but the cash burn is low (FCF now -$1.3m compared with cash available of $55m). So there is time for revenue growth, margin expansion and sales force productivity to develop. I'm prepared to be patient.

Good updates on product development pipeline, publications and line extensions, all being managed at a constant investment cash flow of $1m to $1.5m per Q.

Overall, nothing exciting, Steady progress. I continue to hold a 1.2% portfolio position IRL. My major holding is $PNV.

To increase my position I'd want to see: a) revenue growth acceleration, b) margin expansion, c) operating leverage, d) continued positive news in development pipeline.

Valuation

I don't hold a valuation on ARX, but on a comparable basis of Market Cap to Sales, it is at a significant discount to $PNV (-42% when I last did the analysis).

EXHIBIT: Analysis of last 8 x 4C Cash Reports

Disc: Held in SM and IRL

Thanks for the excellent summery, @mikebrisy

I was also on the investor call this morning and agree with your management assessment. Over time my impression of management is competent, straight talking and not overly promotional.

I think their outlook is worth mentioning, the understated comment that “the environment looks to be improving”’ translates into greater hospital access, product synergies and enough clinical data to drive sales.  Given other companies in the health space have failed to get traction in the States over the past 2 years I think this is a positive for management in navigating difficult situations.

Their stated core reasons for listing, to build a commercial operation in the US, increase sales and continue with R&D, seems to be on track so far.

I did a side-by-side comparison to PNV, it’s over a year ago now so the figures are out of date but at the time it struck me that the $ spend on R&D for ARX was higher than PNV despite the big difference in market cap, etc.  (I’ll try and update the comparison if I get a chance.)

It will be interesting to listen to the PNV meeting Friday and compare management impressions

Held RL

Aroa announced their FY22 and FY23 Outlook today.

HIGHLIGHTS FY22 Results

• Audited full year product revenue of NZ$39.2 million, reflecting an 81% increase on FY21. On a constant currency1 basis, product revenue was NZ$37.7 million (an increase of 84% on FY21), exceeding the Company’s upgraded constant currency guidance of NZ$34-37 million. Total revenue (inclusive of project fees) was NZ$39.7 million, representing growth of 78%.

• Product gross margin of 76% (75% constant currency), representing an 8% increase on FY21.

• Result delivered despite COVID-19 continuing to impact access to hospitals and procedure volumes in the US.

• Normalised EBITDA loss for FY22 was NZ$1.5 million, compared to a loss of NZ$3.3 million in FY21. Normalised loss before income tax was $5.2 million (NZ GAAP Loss before income tax of NZ$8.3 million) compared to NZ$7.5 million in FY21 (NZ GAAP Loss before income tax of NZ$19.1 million).

• Strong cash balance of NZ$56.1 million with no debt. FY23 Outlook

• Product revenue guidance of NZ$51-55 million, to deliver 30-40% growth on FY22.

• Product gross margins are expected to improve to 77% due to increased sales of higher margin Myriad™ products and improving manufacturing efficiencies (despite increased indirect overheads from the new manufacturing facility).

• AROA is continuing to invest in its US salesforce and product development to drive growth in FY23 and beyond. As a result, it is forecasting an EBITDA loss for FY23.

• Given the dynamic and evolving impact of COVID-19, guidance is subject to no material decline in US medical procedure numbers or sustained disruption to AROA’s manufacturing or transportation activities and TELA Bio, Inc. delivering on its revenue guidance of US$40-45 million in CY22.2 It also assumes an average NZD/USD exchange rate of 0.70. 

Link to the presentation https://wcsecure.weblink.com.au/pdf/ARX/02524264.pdf

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My reflections

Given the sales growth over FY22 of 81%, the outlook for FY23 of 30-40% appears undemanding, and you'd think there was room to outperform.

Aroa are continuing to invest for growth in i) manufacturing facilities, ii) direct sales force, iii) new market registrations, iv) product extensions and v) development of the innovative dead-space management product, which they hope to file for FDA approval later this year. The believe this could take anything from a year to 2+ years for approval, but claim that it would essentially be a unique solution in an uncontested market of c$1bn. For me, this is the blue sky in the valuation.

Some further info provided on the call (for those who follow related commentary by $PNV), in terms of sales force addition, they see new starters becoming cost neutral by end of the first year and achieving peak performance over 3 years.

There have strong cash reserves as a result of the raising last year, no debt and a modest cash burn as they transition to cash flow positivity over the next two years, but they are currently in an investment phase as noted above.

EV/Revenue is a modest 8x compared with 19x for PNV and, while overall margins are not as strong as for $PNV, there are giving a strong focus on the Myriad product suite, which has gross margins 90-98%, compared with the overall portfolio GM achieved of 76%. As a result they are forecasting improving GM over time with an outlook for 77% in FY23.

Now only in its second year from listing, management come across as understated, on top of all aspects of the business, and are progressively building a track record of delivering on their promises.

If they continue to deliver and outperform I expect they will start to get onto more analysts radar, and when you start doing comparable valuations in the sector, they look cheap. So in addition to underlying performance, there is the potential for a re-rating. But I am getting ahead of myself here.

I have held since shortly after IPO and am currently about 30% underwater on a small position. Am not in the least bit concerned by this, as the longer I get to know management, the company and the product suite, the more confortable I get. Will be increasing my position in line with my assessment of falling execution risk.

Disc: Held IRL and SM.