Also selling out of IHR.

As per @thamno's straw, last week IHR announced that things were tracking ok. There were two things of particular note in that announcement:

• the number of enterprise customers has increased to 6, from 2 the previous quarter
• ARR has doubled since last December to $5.5m

Both very encouraging.

I had another look at their product compared to competitors. Their USP seems to be employee engagement and career satisfaction. There has been a lot of commentary regarding "the great resignation" and 2022 being the "year of the worker". All this points to greater worker mobility, and an unwillingness to put up with substandard employment conditions. (links to relevant articles in the Economist)

Evidence of the balance of power passing from employers to employees seems to be everywhere these days, the rise of unionism, increasing strikes, pay rises and increases in minimum wage levels.

This all plays neatly into IHR's product offering. If you want to have the best staff, it is easier to not loose the good ones you already have, rather than to be constantly chasing new hires in a competitive market. Their software claims to be able to predict, with a degree of accuracy, how likely an employee is to leave, allowing the employer to take action to mitigate this. Apparently, they can reduce attrition rates from 60% to 5% for some clients.

The second feature I believe will be particularly useful, is their module for ensuring remote workers are feeling loved and valued. Most commentators seem to think that wfh is here to stay. Omicron will certainly ensure that is true for the short term, but much of my reading would indicate that a degree of wfh is likely to outlast the pandemic. Ensuring these workers feel engaged, have the correct support and equipment they need and can be productive with their team and goals will be a challenge. IHR provides a module to do just that.

It also does many of the other less fancy things that HR software should also do such as ensure compliance with mandatory training is up to date, appraisals, feedback and all the hiring/CV stuff.

It scores 4.9/5 stars on cap terra, 5/5 on softwareadvice.com.au

Lockdown does allow some things to get done that would otherwise would not!

Signals that can point to greatness for SaaS companies include:

- T2D3 = from start up tripling ARR every year, then doubling for the next 3. This brings a start up from an ARR of 1-2 million  to over 100 million and a MC of 1 billion. IHR has accomplished one T with an increase in ARR of 263%. Tick

- low churn = 0.5%. Tick. Actually less important in early stage SaaS but hey, nice to get another tick.

- high gross margins. Would hope for something in the 70s (like Damstra). Did not answer my request for information on this metric. Assumption is therefore this is a fail. Margins tend to improve with time, so am guessing they will start reporting this only when it looks good. No tick.

- months to recover CAC < 12 months - from personal communication this is less than 12 months for APAC but longer in N America (where they are a newer entity and offering preferential deals). Tick

- a net retention rate > 100% ie each customer uses the product in an increasing fashion over time. From personal communication IHR reports 106%, which they believe was impacted by COVID, and estimate they will return to 112% which was their pre-pandemic normal. Tick.

- LTV:CAC >3 lifetime value of a customer / the cost of acquiring them. I am unable to get the data for this as CAC is not reported. I may be able to derive this from annual report, however, if NRR as >100% (see above). Probable tick.

- the Bessemer Efficiency Score, is a measure of both growth and efficiency use of funds: is the company blowing cash in the pursuit of growth or doing so wisely. It can be calculated by growth rate + FCF margin. I will have a crack at this after the annual report. 

- Rule of 40. Defined as the growth rate +/- cash burn or revenue. This probably applies to more established, later stage SaaS companies. A modification for earlier stage companies is the weighted version (revenue growth rate x 1.33 + EBITDA margin x 0.67). Again will update this straw with most current figures after annual report.

Another great 4c. Still some metrics

not being reported in a reliable manner and expenses increasing. 
muted SP response likely reflects inevitability of upcoming cap raise and hence dilution. Will no doubt drop lower around this time. 
will be looking to add a further small amount when opportunity presents itself. 
with such tiny companies DCF is challenging and even a rough EV/S is difficult as a couple of large enterprise customer contract wins blows the "S" up out of all proportion. 
25-50% quarterly increases in ARR can be expected in the short term, making the valuation leap spectacularly. The big question is if they can sustain these wins as a percentage of total sales rather than an absolute number ( which will become less and less meaningful as the MC grows)

hopefully they can but super high risk. 

Extraordinary stuff from IHR. the Slattery Midas touch continues

disc: small holding

K Expansion underpins record H2TD growth
304%
Record New ARR Added H2 FY20 vs H2 FY21*
$3.55m
Contracted ARR
35,080
Total Subscribers YoY Growth of 2.7 times
100%
H1 vs H2 Average Lead Generation
? intelliHR is pleased to announce its Q3 expansion into the UK market has been rewarded with a cornerstone UK enterprise customer win
? 3 enterprise customer conversions in H2 FY21 to date (previous best was 3 wins in the full H1 FY21)
? Record new ARR acquisition in H2 FY21 to date – up 304% YoY* from H1 FY20
? Record new Subscriber growth in H2 FY21 to date – up 510% YoY* from H1 FY20
? Contracted Annual Recurring Revenue (ARR) increased to $3.55M as 28 April 2021
? Contracted Subscribers increase above 35,000 - nearly tripling YoY
? High quality customer base continues to grow with strong retention continuing
? Lead growth has doubled in Q3 FY21 to date with global expansion opening new markets
The first 4 months of 2021 saw intelliHR Limited (ASX: IHR) deliver continued improvement in key growth metrics including New Recurring Revenue, Subscribers, and Customers.
intelliHR has expanded into the UK/European market with the establishment of an instance of the intelliHR software platform in a European Union-based data centre supporting both European and North American market. This has already been rewarded with new business growth in H2 FY21 including the acquisition of a major new UK enterprise customer. The conversion of TRU West Alliance results in intelliHR partnering with ARUP, a leading global engineering group. The 36 month contract will support up to 1000 designers employed in the initial phase of the TRU West Project that is expected to generate revenue of between $280,000 and $511,000 AUD in the next 12 month period. With as many as 10,000 team members potentially joining the TRU West Alliance Project over its expected 7 year project life, there is considerable potential revenue upside beyond the first phase.
*- H2 FY20 vs H2 FY21 – compares data from 1st of Jan to 28h of Apr in each respective year
29 April 2021
  dgfhdtgdgdf*- H1FY20 gssdgfsdfs*1

 29 April 2021
intelliHR Managing Director, Rob Bromage, said: “Following our North American market successes, we chose to accelerate our expansion into the UK market. This decision has already been rewarded with ARUP and the TRU West alliance choosing to partner with intelliHR through competitive tender. Engineering Group ARUP represents a prestigious cornerstone UK/European customer that will be supported by a new instance of intelliHR’s platform in AWS’s EU region. With Enterprise Client successes in APAC, North America, and now the UK/Europe, intelliHR is clearly being recognised as an Enterprise HR and People Management platform capable of supporting global business needs”.
In addition to the ARUP/TRU West Alliance, intelliHR is also pleased to confirm the addition of another 2 Enterprise conversions in H2, with innovative container processing business, Young Guns, and Australia’s largest specialty baby goods retailer, Baby Bunting.
“The diversity of industries the intelliHR platform is supporting from these three recent Enterprise conversions alone clearly demonstrates the exciting market opportunity available to us”, said Mr. Bromage.
In selecting intelliHR, Young Guns HR Project Manager David Collins said: “We chose intelliHR through a competitive tender, they have demonstrated they can competitively create a solution which transforms our HR eco-system and is capable of meeting the current and future needs of Young Guns. The support through the tender process was second to none, and they responded to our needs in a manner which made choosing intelliHR as a partner very easy.”
These new Enterprise customers join other recent Enterprise conversions, OSLRS, Scope Australia, and Emerge Aotearoa. They also join other longer-term enterprise accounts, My Health, Fujitsu, Contact Energy and DBM Vircom, amongst others.
Authorised for release by the Board of intelliHR.