Here are my rough thoughts after the FY20 Catapult results presentation in August 2020:

• Really impressed with Will Lopes (new CEO), taken control of the business, strategy – focused on customer obsession and developing a comprehensive platform of integrated solutions for elite sporting teams and athletes. Love the customer focus.
• Also focused on generating long term positive FCF as the main metric for shareholders.
• Lopes obviously has extensive experience with these subscription business models (previously he was in charge of scaling Audible, an Amazon subsidiary), as he has introduced a number of new financial SaaS metrics (ACV, Lifetime Duration, ACV churn, Contribution Margin)
• Hayden was a bit stiff, but not a bad thing for CFO. Obviously excited about the future of the business and these new SaaS metrics.

Catapult’s management have recently refreshed the business strategy, emphasising long term results and the ultimate goal of generating long term free cash flows. At a high level, their strategy is focused on 3 key ingredients:

• Customer obsession, with solutions focused on the customer;
• Capital investment with a long-term focus; and
• Prudent, deeply analytical decision making.

Management are aiming to move away from a product-based strategy towards a customer solutions based strategy. Elite sporting organisations seek technology solutions across a variety of problems, and although Catapult is a leader in some categories (i.e. management, performance and health, and tactics and coaching), there are numerous other services and features sought by these organisations that Catapult can provide (e.g. professional services, media and engagement). It wants to develop the most comprehensive suite of solutions in the market that provide deeper and more meaningful value to athletes and teams. Catapult is focused on its professional customer segment, rather than the prosumer category.

More specifically, management have identified the following focus areas:

• Platform expansion – drive greater value for customers, measured by ARR growth
• Subscription focus – move core business model towards SaaS, build sustainable revenues. Service oriented businesses are successful through building customer relationships. Measured by % of revenue that is recurring.
• Efficient cost structure – must be a sustainable business model. Seek to improve variable and non-variable costs. Design multi-year roadmap, execute on key metrics. This focus creates long term FCF. Measured by opex as % of revenue.

Catapult is a global sports technology business that is building the platform of solutions for elite teams and athletes. Currently, Catapult’s platform includes wearable tracking solutions, video and analytics. Catapult, headquartered in Melbourne, Australia, works with ~3,000 teams in 137 countries around the world and across 39 different sports. Catapult has approximately 340 employees and a market capitalisation of approximately $320m (August 2020).

Catapult operates via 3 segments:

• Wearables (e.g. Vector, ClearSky) – wearable hardware devices (i.e. vests) with a GPS, accelerator etc. that provide athletes and their sporting organisations with detailed, real-time data and analytics to monitor and measure their fitness, risk of injury etc.
• Video Analytics (e.g. Vision, PlayerTek) – digital video coaching and analytics solutions, video platform for coaches to edit, share and communicate highlights.
• Other / New Products – athlete management platform that collect, store and communicate athlete information.

Catapult’s customers are predominantly elite professional sports teams, including various NBA teams (e.g. Golden State Warriors), NFL teams (e.g. Dallas Cowboys), soccer teams (e.g. Real Madrid) and universities (e.g. University of Notre Dame). Catapult has also signed league-wide deals with certain sporting leagues or bodies such as the AFL, NBL and Cricket Australia. The company also provides solutions to semi-professional athletes under its ‘prosumer’ division.

As athlete health and wellbeing is becoming a priority for elite sporting teams, Catapult helps these teams monitor, track and provide feedback in real time to athletes and coaches.

Catapult’s purpose is to build and improve the performance of athletes and teams.

Catapult’s largest markets are Australia, Europe and North America – with the US becoming the predominant business over the last 18 months.

• Catapult provides best-in-class solutions to elite athletes, with a loyal customer base that includes the most elite sporting organisations in the world.
• Highly scalable, SaaS business with high margins, sticky recurring revenues and multiple growth avenues within a growing sports technology market.
• Catapult’s new management team has refreshed the overall corporate strategy, focusing on customer obsession and profitable growth, and has already guided Catapult past a number of important milestones including positive free cash flow.