FY20 Full Year results - 19 August 2020
ACV came in at $106.4m, at the upper end of their $103-107m range provided on 28 May (when they were already >$102m ACV).
This seems decent enough given their churn issues in December/January and COVID-19.
Of note, the STCRs for US and AU which are historically around 100% were down to 34% and 58% (US) and 69%, 79% (AU) for H1 and H2 respectively. This reflects both the churn events, loss of focus in AU, and addition of new sales staff in US.
Also noteworthy is the Trade Receivables have grown significantly. Image attached. There's roughly $2.6m in receivables >30 days old, vs $550k at 30 June 2019.
Looking ahead, my best guess for 21H1 ACV is:
1. AU: $68.5m (+$4m)
2. US: US$33.4m (+US$4.7m)
This is based on the following assumptions:
1. Direct sales cost remain constant (as indicated by commentary today saying they expect costs to remain roughly stable)
2. STCR improvements: AU improves from 79% to 90% and US improves from 58% to 70%.
I believe these are reasonable assumptions as the AU STCR had been affected by sales leadership being stretched globally, and we now have Jeff Adams in the CRO position. And US improvement to come from the team gaining experience and operational improvements.
So I'm confident we'll be properly* cashflow breakeven by Dec 2020 assuming no external explosions.
*- Nearmap achieved cashflow breakeven at 30 June 202 through the cost cutting measures taken in April. Properly cashflow breakeven means reversing the April compensation cuts.
The provided outlook is for closing FY21 cash balance of $32-35m is where we are today. Which is to say that they expect to ramp up spending again early next year.
All in all I think it's quite a positive report other than the trade receivables which could dent ACV by ~$1-2m.