A solid result from Siteminder. @west has posted the key details, but the company has delivered exactly what they said at their IPO and in line with what CEO Sankar Narayan said we spoke to him in early June.

...and yet shares are down 33% since then!

Yes, they're burning through the cash, but they have +$100m in 'liquidity' ($25m in cash, $50m in term deposits, and a $30m loan facility). Moreover, it's more about what they are spending the cash on and what return they are getting on that -- and investors can't really pretend to have seen any nasty surprises.

Of course, the macro situation has changed a lot, as has general market sentiment. And they are directly related to travel.

Fair to point out too that shares are still on 5x ARR, so certainly some growth priced in.

Still, this is all about a huge market opportunity, high margins and a capacity (it is hoped) to scale effectively.

I don't own, but on my watchlist.

Hope you found the discussion with Sankar Narayan valuable.

He struck me as a straight shooter with a clear focus on what matters, and as someone who is thinking years into the future.

You can catch the recording on the Meetings page, but a few things that stood out for me:

• There's a very large market opportunity, with 1 million small to medium hotel chains globally (ex China)
• They are the largest player and 3x the size of their nearest competitor
• Sankar is wary of acquisitions and mainly focused on organic growth
• They have a LTV/CAC of 3-4, which allows for very attractive unit economics and helps explain the investment expenditure. This is exactly what happened at Xero when he was the CFO, and it builds a very attractive cash flow stream as the business scales.
• Macro conditions are uncertain, but he's not focused on predicting it. They have however done a lot of scenario analysis and have thought through a wide variety of possibilities. All that being said, if Covid couldnt knock them over, it's hard to see how an economic slowdown could be any worse. Moreover, the re-opening dynamics are more likely the dominant factor over any macro headwinds.
• They are cash flow negative by choice and well supported by a very strong balance sheet. That is, as with covid, they can easily pull back on Capex and remain viable if needed.
• New modules, recently released, provide significant upsell potential. 32% of customers use only one product.
• They have some serious investors aside from Bailador, including Blackrock.

All told, it looks to me like a well run business that has not only survived a near existential threat, but emerged far stronger on the other side. Management is capable, aligned and thinking long term. The business is very sticky, and should scale well as revenues grow, and is unlikely to need any outside capital for the foreseeable future.

All that being said, despite the drop in the share price, shares are still on something like 10x ARR. Yes, it's growing well with attractive economics, but it feels like a lot in the current market.