I am in agreeance with @Valueinvestor0909 and @Jimmy; their FY23 update is impressive. NAN benefitted from currency conversion, but even with this excluded, total revenue is up 36%. Installed base (IB) has increased by 815 since the last update, which is consistent with both business expectations and my thesis -- an increase of 2000-3000 per annum is broadly what I want to see. As forecast by other members, we are entering an upgrade cycle for many of NAN's customers, so it's not surprising to see this tracking along nicely too -- up 51% vs PCP. Perhaps importantly, the business revealed they are performing well across all regions.
We also got some insight, albeit limited, into NAN's cost structure. In FY22, 43% of costs went to market growth/expansion, 25% to R&D and 32% to supporting general business, support and HQ costs. The allocation of costs for FY23 is expected to be very similar in comparison to FY22. The business also expect R&D costs -- as a percentage of revenue -- to decrease as NAN continues to scale. Unfortunately there is no indication (unless I missed it) of cash on hand, but I would anticipate this has increased since the FY22 report (94m).
Due to uncertainties with the North American market -- possible covid disruptions during winter, inflationary pressures on hospital budgets and currency movements -- the business elected not to provide updated outlook for the full year. This is a good move in my books.
Are we starting to see the business benefit from NAN's direct sales model in North America? Short term forecasts and uncertainties aside, this remains a bottom drawer stock for me. We have a market leader with a large addressable market, who continues to invest in its future cash flows -- making entry into the market a difficult proposition for competitors. Everything appears well here.
Disc: held
