At 22nd July 2025

Return (inc div) 1yr: 60.56% 3yr: 18.80% pa 5yr: 7.77% pa

Qoria (QOR) has just broken through the 50c barrier on good volume - it's made a couple of attempts at it over the last few months. So a nice bullish chart, and popular with the fund managers too I gather:

"Qoria provides filtering and monitoring technology... Teachers are struggling to control what their students are looking at, and also bullying and cyber safety are huge issues not only in the US but globally as well. Qoria is a market leader in that segment - they've got a 13% market share in the US, and just under 40% in the UK. They're quite large in Australia as well, with a 20% market share."

https://www.livewiremarkets.com/wires/18-stocks-backed-by-a-fund-that-returned-42-in-12-months

 “We have Qoria, which is a stock I've been hearing a lot about lately. A lot of fund managers are liking it right now. It's the old Family Zone business focused on cyber safety for kids.”

“You've got 120 million ARR, which is huge. It's a global business with legislative tailwinds, the balance sheet is strong, free cash flow is growing. As I said, the best shape it's been in there a long time.”

 “I think it's a takeout target, so hence why it's a buy for us.”

https://www.livewiremarkets.com/wires/buy-hold-sell-5-of-the-asx-s-fastest-growing-small-caps

(I hold QOR in RL)

Family Zone Cyber Safety released their 3Q22 results and there was also a flurry of other reports about a new CFO and the Qustodio acquisition.

As per Tim Levy, the Managing Director "a record March quarter was driven by an outstanding UK result where we beat ARR sales targets by 12% and global targets by 10%". He goes on to say they are confident they will have a record June quarter as well.

The Qustodo acquisition looks like a solid bolt on of their capabilities & should assist in their growth ambitions. Bit disappointing that they didnt allow retail investors to participate.

Look, I like the FZO story, I really do, but are we being overly enthusiastic about growth?

I think the best representative of past growth and thus some form of marker for future gorwth is the Appendix slide which appeared at the end of the AGM presentation.

Yep, handy growth but not as dazzling as the ARR graph much earlier in the preso which would suggest they are shooting the lights out. Check out the comparisons.

Certainly not suggesting it was deliberate, but might be misleading to a novice or a speed reader who simply scans.

Family Zone have announced that they are acquiring Smoothwall for $142.0 million.

Smoothwall is the UK's leading provider of K-12 digital safety solutions, servicing approximately 38% of the market. This is a great business with a firm market position. They have an annual recurring revenue of circa $30.0 million.

Family Zone are also undertaking a capital raising as part of this acquisition. In the coming week I will do a deep dive into Smoothwall and post what I find. It's hard to think of reasons why this wouldn't be an amazing acquisition. I think it will propel their business forward and really capitalise on Smoothwall’s already established position in a big market. I reckon it's a buy at these prices.

DISC: hold a small parcel IRL.

Highlights

In the half year ended 31 December 2020 the Group continued to achieve solid growth across all key metrics including:

• Revenue from ordinary activities up 85% to $4.4 million;
• Customer collections up 165% to $7.1 million (from $2.67million);
• Contracted schools, up 145% to 2,861 schools with a further 271 schools completing trials; and
• Contracted student licences, up 144% to 1.5 million contracted students and 1.67 million on the platform;
• Ended the period fully funded for its current growth plans with $25.9 million cash.

Family Zone’s education sales pipeline, inclusive of proof-of-concept trials, also remains strong at the end of the period. The Group is planning a soft launch of its consumer business into the US market in early 2021 through the significant Family Zone Community network associated with the US schools it currently services. The Company has also continued to grow its contracted review with approximately $8 million of total contracted revenue signed in the period.

Family Zone came up on a screener and I’m glad I’ve found what seems to be quite a little gem. While having an EV to revenue multiple of around 13.5, the yearly growth is impressive achieving an estimated 103% YoY. They also received a huge lift in sales in June based on US school district budgets. From a technical perspective, as of today the current price seems to be in a bull flag consolidation and given the current cyber security tailwinds at the moment, I would expect this could creep a lot higher from here.

This company has been a highlight and a lowlight. Held from 16c all the way to $1 and then held it all the way back to mid teens. A few stuffups in the business strategy (imo) resulted in too much cashburn for too little return, such as too much focus on Australia, failed international telco business model (changed now)

The company appears to however finally realised it has to go for the big game by penetrating the education sector in the United States of America. Unlike Australia where a single school client can require signifcant resources to attract, the United States school system is made up of school districts, each of which comprised multiple schools. Signup a district and you signup several schools all in one hit. And there are 100k schools in the US!

Further they have refined the strategy so that rather than just selling student subscriptions they offer more school oriented services (such as classroom manager) and instead charge the school a per student license fee. And its working a treat so far having signed up 65 school districts in a very short span of time because their offerring is vastly superior to the competitors such as iBoss. Parents ofc can still opt into the actual subscription service.

I feel however it will take at least a couple more quarters for the full impact of this to become apparent. More school district wins in the US is critical. However I estimate by 2nd qtr CY20 FZO will have achieved breakeven on an annual basis on recurring revenue alone.

Catalysts:

• more US school district wins
• Larger multi school arrangements in Australia and/or New Zealand
• Woolworths, JB Hi Fi and otehr retailers successfully promoting the FZO service to parents...the subscription service is very high margin
• Successful Telkomsel launch in Indonesia with significant takeup to verify the new telco model of offerring a free service with parents having the option to upgrade to premium subscription service...other telcos around world will be watching this very closely
• Succesfully attracting insto investors to the company through business success and effective promotional roadshows...the new very high profile chairman (also DUB) will be CRITICAL to this

Same patent awarded in Australia on 'Device management system'. Need to find more details on this patent. If I find something, will post it.

US Patent awarded related to their 'Device management system'. Don't know the details behind the patent (trivial / significant) as it has not been made public yet. May put up a fence between them and the competitiors.

Next report should provide some light on this. Expected around 31 July 2019.

Rapidly rising signup rate and better revenues expected. If the current sign-up rate continues they could be looking at $15M+ revenue in ARR by FY20-21.