"Great quarter, guys." But seriously, a fair effort, that.

I was going to write the other day about possible reasons for the market's coolness toward Ava Risk, but it seems the market just had no inkling of today's mostly very predictable good news that was also foreshadowed in a market-sensitive update only a few weeks ago. Blame Ava Risk's management for not launching a loss-making division in online retail, SaaS, COVID vaccines or unsecured BNPL loans.

But one interesting question remains. Unless I'm mistaken (which is quite possible!), Technology did not have a good Q4. Ava has been cagey about this but the guidance in early July mentioned $2.5m in delayed orders and alluded to difficulties. You, or at least I, can see this when putting all the numbers together. I get about $1.2m in non-IMOD revenue for Q4, which is down from $3.8m in Q3. Even if you add in the delayed orders it's still flat. While I haven't double-checked, I think the $4m in FCF is pretty much coming from Services, which Ava Risk wants rid of, and IMOD, which is lumpy and finite. IMOD also flatters margins (albeit there were signs of non-IMOD operating leverage in Q3). 

The lure of Ava Risk has been a value stock with growth optionality and there are several ways for it to do well. But the preferred way is for Technology (chiefly FFT) to grow organically at a good clip, helped by Aura IQ and Defence tailwinds, and for Services to be sold at a good price. Neither of these things is looking compellingly likely to me just at the moment. I'm hopeful that will change but given the ramping and self-congratulation I thought a note of caution might be in order.

Disclosure: hold a tiny amount.