Discl: Held IRL 5.72% and in SM

Had a quick look at the SDR FY25 AGM material. It was a good opportunity to sit back and reflect on the journey thus far (super-pleased) and where this is all heading (north-ward bound!).

The one significantly misunderstood aspect of SDR is that it is NOT a channel distribution manager but a central revenue platform manager. Very pleased that during the FY25 results and the recent Investor Day, management has used more decisive and precise language to articulate this sharp pivot in positioning - this continued in the CEO address, highlighted below.

KEY THEMES FROM ADDRESSES

The SiteMinder team is delivering: “We are delivering for our investors, achieving a strong financial performance headlined by accelerating growth, improving unit economics, and critically, profitability, with both underlying EBITDA and free cash flow positive for the financial year”

On AI:

“We are not just participating in this shift; we are defining the future of our industry”

On FY25: 

“It was a year defined not just by our strong financial achievements, but by the successful execution of our Smart Platform strategic plan”

“FY25 was a year where the travel industry faced volatile and challenging trading conditions buffeted by geopolitical conflicts and policy pivots. Against this backdrop, SiteMinder managed to deliver robust growth and momentum .... This acceleration is a powerful endorsement of the resilience of the business, our strategic product initiatives and the growing value hoteliers find in our platform”

“Our enhanced operating model provides the healthy, self-sustaining bedrock for our continued expansion, ensuring that our growth is fully funded by our own success”

On the Smart Platform: 

“By successfully executing the Smart Platform strategy, SiteMinder is leading efforts to address critical challenges facing hoteliers, and redefining how the hotel industry manages revenue and guest acquisition

“We are moving beyond the role of a channel manager to become their central revenue platform - the unified interface where revenue decisions are made, executed, and automated.

On the opportunity ahead:

Our current annual recurring revenue unlocks approximately 0.3% of the $85b of gross booking value we facilitate. This is a very small fraction of the value we create for our hoteliers. However, when we estimate the potential value unlock at full product attach - meaning customers adopting the full suite of Smart Platform tools - that figure rises to over 1.5%. This is a significant revenue opportunity simply by deepening our relationship and value delivery to our current customers. This is an organic, high-margin, and a greater share of wallet from additional product adoption.

Outlook and Trading Update:

“ ... the positive momentum from the end of FY25 has continued, with ARR growth (on a constant currency and organic basis) tracking in like with the rate achieved in FY25 (27.2%) - reinforcing the stability and resilience of demand across our platform”

Only picked up 2 new slides, worth pointing out:

Good summary of the momentum in play across the SDR business

And the opportunity ahead - the Smart Platform rollout is really only just beginning.

Chart Review

The share price made another all-time high today, peaking at $7.96. While I think the market is taking notice and becoming increasingly bullish, the price does feel somewhat exhausted for now after the post FY25 results re-rating. I do not expect it to do too much other than bounce around at this levels and retrace a bit - not a bad thing to take some froth out of the price ahead of the 1HFY26 results.

Discl: Held IRL and in SM

Bailador took some nice profit with the sale of ~3.46m SDR shares, ~25% of its holdings of SDR

Post the sale, BTI still holds 75% of its SDR holdings

Market seems to have absorbed the sale very nicely with the share price moving sideways and staying above both the 7.20 support line and the medium term uptrend line, despite the heavier-than-normal volumes - a really encouraging sign of continued price strength.

Discl: Held IRL and in SM

SDR Things To Focus On

Pre-reviewing the results, I listed these 6 questions to answer, followed by the answers:

1. Is revenue growing - dollars, ARR, ARPU? Absolutely - a decent noticeable acceleration in 2HFY2025
2. Are the Smart Platform products contributing to growth? Hell yeah .... ! Big Tick
3. Was there progress on LTV/CAC? Yes, improvement of 0.8x to 6.2x, driven by rising Customer Lifetime Value (LTV) vs flat Customer Acquisition Cost (CAC)
4. Was there progress on Rule of 40? Yes, 3.9% increase to 21.3%
5. Was there progress in the path to profitability? Absolutely - 2 consecutive Half’s of Positive Underlying EBITDA, EBITDA 2H jumped HoH (1H: $207; 2H $6,704) resulting in SDR’s achieving the target of full year Underlying EBITDA positive in FY25 $7,052 - Big Tick
6. Was there progress to positive FCF? Yes, Net Cash from Operations up sharply YoY from $14.4m to 23.6m, Cash Burn fell YoY from ($10.8m) to ($7.6m), cash balance $33.4m, need to peel FCF report more

TLDR SUMMARY

• Cracker of a result all round 
• My 1H commentary was “Thesis is very much intact. 2HFY25 should be more interesting as rollout of the 3 Smart Products will be in full swing and the impact of accelerating revenue should be more pronounced.” - this has now played out very nicely
• Smart Platform products are now contributing to revenue and revenue acceleration from 2HFY25
• Strong continued momentum on all operating metrics - ARR, New Property Additions, No of Properties on the Platform, Transaction Product Uptake, ARPU
• Market concerns around slowing travel discretionary spend does not appear to have materialised - revenue growth was strong in all regions
• Translated into strong Revenue Growth across both Subscription and Transaction Revenue
• Margins have improved: Subscription 86.4% (FY24: 85.1%) and Transactions 33.7%, (FY24: 33.7%), Overall gross margin has fallen to 66.3% (FY24: 66.5%) as expected, due to the shifting revenue mix of 62% Subscription: 38% Transaction (FY24: 64%:36%) - very healthy
• Translated into a jump in EBITDA in 2H, and the first full year of Positive EBITDA and Underlying EBITDA
• And improved Free Cash Flow

Chart Review

Market has responded positively, but there is long-term resistance at ~7.03, which goes back to post IPO days of Dec 2021 as well as the long-term upward trend line, both converging at around the same levels, which has limited the pop.

Expecting the price to now bounce sideways around the ~6.40 to 6.50 levels, while the analysts re-crunch the numbers.

Action

None - already fully allocated

This is a long-term high-conviction hold as the thesis is only just starting to play out and need to give management time to build the growth momentum in the next 1-2 years.

--------------------------------------------

Attaching my detailed commentary for anyone interested in the detail:

Financial and Operating Metrics

• ARR has accelerated - sharp jump in 2H, ARR Growth Organic now 27.2% (1HFY25: 22%), driving Revenue Growth 19.2% (1HFY25: 17/2%)
• Significant jumps in Transaction Revenue ARR Growth and Transaction Revenue growth - SDR’s focus to monetise transactions flowing through the platform are now paying off
• Transaction ARR growth of 48.3% YoY Organic is running significantly ahead of revenue growth as the scaling of the Smart Platform initiatives kicked in towards the end of FY25

Strong continued momentum in (1) New Property Additions (2) No of Properties on the Platform and (3) Transaction Product Uptake

Continued focus on penetrating larger hotel properties - this was not SDR’s original customer base, but is now becoming significantly more important as SDR monetises Gross Booking Value on the platform.

Which drives continued ARPU increase momentum:

And translating into continued HoH Revenue and Annualised Recurring Revenue growth, respectively

Rate of revenue growth in 2HFY25 has noticeably increased - a 14.8% jump HoH vs fully year increase of 17.7%.

Revenue growth has driven profitability with 2 consecutive Half’s of Positive Underlying EBITDA, resulting in SDR’s achieving the target of full year Underlying EBITDA positive in FY25.

3.9% improvement in the Rule of 40

0.8x improvement in LTV/CAC, driven mostly by Customer Lifetime Value increases, with Customer Acquisition Costs remaining quite flat.

Regional Performance

Revenue growth was strong across all regions - debunking market concerns about slowdowns in travel-related spend, a discretionary expenditure, as cost of living pressures kicked in during FY25

• All regions grew in excess of 20% Organic in 2HFY25
• APAC and EMEA accelerated HoH reflecting resilient travel trends (perhaps the pivot away from the US as a travel destination) and contributions from the Smart Platform initiative
• America’s sustained HoH momentum - contributions from the Smart Platform initiatives offset the moderation in general travel conditions - the Trump effect?

This resilience augurs well for FY26 as the global interest rate cycle moves more firmly towards an easing bias in FY26.

Smart Platform

This is a really good slide which emphasises a point which I think the market still has not got clearly - SDR is not a global room distribution platform alone - it is much more than that.

SDR’s Smart Platform has deeply embedded capability in (1) Revenue Management - previously the domain of large hotels with dedicated headcount to directly manage revenue and (2) Guest Experience ON TOP OF (3) the more traditional “Guest Acquisition” capabilities - a very nice term for the Booking Engine, Global Distribution, Channels Plus capabilities

The monetisation engines would reside primarily in the Guest Acquisition and Guest Experience areas

Late FY24 into all of FY25 was about building out the Smart Platform capabilities and then deploying them to SDR’s customer base - evidence from 2HFY25 is that meaningful revenue is now coming through from these recently deployed capabilities - this was what the market needed to see to believe.

Cash Flow Position

Cash flow performance looks good at face value but need to peel this a bit more, especially the adjustments

• From the cash flow statement:
• Net Cash from Operating Activities was significantly up YoY - FY25 was $23.6m vs FY24 $14.4m
• Net Decrease in Cash fell to FY25 ($7.6m) from FY24 ($10.8m)
• Cash Balance is $33.4m, vs FY24 $40.2m
• No concerns on cash

OUTLOOK

More of the same FY25 in FY26

No change to the general medium-term 30% revenue growth target

Just doing what they said they would.....

I like the dislocation in ARR vs Revenue, 2026 could be break out...

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02984182-2A1616627&v=4a466cc3f899e00730cfbfcd5ab8940c41f474b6

My thoughts: https://arichlife.com.au/siteminder-asx-sdr-1h-fy25-half-year-results-analysis/

SiteMinder's results seemed pretty good to me.

Revenue up 17.2% and ARR growing 22.0%, but the market reaction suggests expectations may have been higher? This pace of growth is well below their medium-term target of 30% organic annual revenue growth.

Also, while they're making strong progress with their "Smart Platform" strategy, short-term incentives have weighed on subscription revenue growth (up just 11.8%). It's really just a marketing expense, and hopefully justified given the high customer retention and stickiness of the product.

There is also the fact that prior to today shares were trading at 8.3x ARR -- which aint cheap by any traditional standard, and assumes strong and lasting growth. So they really needed to knock it out of the park with these results to justify a further expansion of sales multiples.

Another assessment from Morningstar, with a bit more detail into their assumptions of SaaS metrics.

Stock Pitch: SiteMinder

An underestimated future category leader.

Roy van Keulen

Market struggles to see a clear path to profitability

The company’s lack of profitability as a listed company, despite an unusually supportive backdrop in recent years, is weighing on the shares.

Our Take

SiteMinder (ASX:SDR) is coming off a heavy investment cycle and has launched more substantively new products than any other company within our Australian technology coverage. The products are unique in the market, and we expect them to be highly appealing as they allow hotels to attract significant incremental demand, with limited incremental expense or effort. We believe these products will differentiate the company’s offering and allow it to pull away from competitors. We think this is likely to result in strong secular growth that will outweigh any cyclical softness in travel spending.

We see a clear path to profitability

• SiteMinder has invested to develop several new products: Channels Plus for demand aggregation, Dynamic Revenue Plus for pricing optimization, and Smart Distribution for inventory management.
• These products are unique in the market, driving differentiation and growth. Current R&D spending therefore doesn’t reflect baseline spending as it is not needed to stay up to date with competitors. Although we expect ongoing investment in absolute terms, we expect it to moderate as a share of revenue.
• We see SiteMinder’s new products as highly appealing to customers as they unlock incremental demand at little incremental expense or effort. They do this by putting the hotel inventory in front of more eyeballs, allowing them to access a larger pool of demand. These products should provide a new growth engine once launched in fiscal 2025.
• We expect SiteMinder’s new, unique products will improve conversion of prospects and deliver higher average revenue per user, or ARPU, thereby lowering customer acquisition costs, or CAC, per customer and increasing value per customer.
• We expect the new products to drive more business for hotels, which improves hotel unit economics and lowers business failure rates, thereby increasing the lifetime of these higher-value customers.

MARKET CONCERNS

Falling travel demand would reaccelerate losses and cash burn

A normalization of travel spending, or a travel recession, directly flows through to lower revenue. This is as transaction revenue primarily consists of payments revenue, which is a fixed percentage of booking value flowing through the platform.

Falling travel demand will also lead to higher business failure rates, and therefore churn, among SiteMinder’s small- and medium-size hotelier customers. This is a headwind for subscription revenue.

INVESTMENT THESIS

SiteMinder is a SaaS company, not a consumer cyclical company …

We think margins will be much more resilient than the market gives this company credit for. Operating deleverage from a potential downturn in travel demand is less severe than the company’s 70/30 revenue mix would suggest or example, if transactions were to decline by 10% with a 10% decline in travel demand, such as in a severe recession, this would only result in a 2% decline in gross profit for the group. This excludes any impact on subscription revenue, which we expect to be more stable.

Research and development spending is currently elevated

SiteMinder has launched significant new, unique products

• Channels Plus: Allows hotels to connect to dozens of second-tier online travel agencies, or OTAs, with a single connection. This unlocks significant new demand for hotels with minimal incremental cost or effort on the part of the hotel.
• Dynamic Revenue Plus: Allows hotels to automatically adjust room rates to optimize for conversion and yield, which boosts profitability.
• Smart Distribution: Allows first-tier OTAs to add more, and higher quality, inventory to their platforms.
• All three products are unique in the market and benefit from SiteMinder’s unique assets, such as its relations with OTAs, its large customer base, and its proprietary data assets.

SiteMinder is out-innovating other channel managers by a factor of 5

• SiteMinder is the only Tier 1 channel manager in the world, with around twice as many customers and twice as much revenue as Tier 2 channel managers, its closest competitors.
• SiteMinder’s scale allows it to fractionalize costs over a larger customer base, especially fixed costs for integrations with OTAs and existing products. We expect SiteMinder has at least 5 times the resources available for product innovation. Given the industry is early in its digitization journey, we expect high returns on these investments. We see scope for many more processes to be digitized and automated, like OTA marketing campaign management or loyalty programs.

R&D investment has produced compelling new products …

• Hotels operate in a competitive industry with low barriers to entry, resulting in low margins and high business failure rates. This means SiteMinder, and competitors, constantly need to replenish their customer base. It also means hotels should be highly receptive to solutions that help improve their odds of survival, such as SiteMinder’s new products.
• Connecting to OTAs is costly, resulting in hotels typically only connecting to a handful of OTAs.Channels Plus allows hotels to access around 15% of incremental gross booking value, or GBV, with minimal effort. This will mostly fall through to hotel profits given the high fixed costs within hotel businesses. For new SiteMinder customers, Channels Plus is enabled automatically, which should help adoption for SiteMinder and hotels.
• Using SiteMinder’s proprietary data assets, we expect Dynamic Revenue Plus will eventually enable hotels to improve the yield on their rooms by around 15%. This additional revenue is highly profitable for the hotels, given their high fixed costs, and represents a valuable revenue stream for SiteMinder to monetize.

Exhibit 1: New products will drive secular growth …

Sources: Company filings, Morningstar Equity Research. Data as of Nov. 30, 2024.

… Leading to secular growth and improving sales and marketing efficiency

• We expect SiteMinder’s new products to drive immediate benefits from higher conversion thus lowering customer acquisition costs, or CAC.
• In the medium term, as a larger share of SiteMinder’s customers start using the new products, we expect higher ARPU. We also expect lower customer churn due to decreased business failure rates because the products make hotels more profitable. Both help significantly lift lifetime customer value, or LTV.
• Lower CAC, higher value per customer, and longer average customer lifetimes are likely to make SiteMinder’s sales and marketing efficiency world-leading relative to peers. As a corollary, it means sales and marketing as a share of revenue can come down significantly.

Exhibit 2: … And boost sales and marketing efficiency

Sources: Company filings, Morningstar Equity Research. Data as of Nov. 30, 2024.

New products to drive growth and a clear path to profitability

As SiteMinder comes off its heavy research and development investment cycle, we expect the company to start generating strong returns from its investments into new products. We expect this to result in strong and efficient revenue growth, as new products improve conversion and retention, allowing for sales and marketing to come down as a share of revenue. We expect R&D investment to remain relatively fixed. We expect any cyclical downturn to have only a limited impact, given the long secular growth trajectory.

I’m on the sidelines now after a decent run.

Balidor then Leslie Szekeley sales, and more recently Paul Wilson as well. Too much movement for me to be comfortable.

Pleasantly suprised to see todays little SDR pop. Technically, it looks like it broke out upwards quite decisively from a nice textbook horizontal flag consolidation in the past week. Theory has it that it "should continue" in the direction of the breakout.

~$7.03 looks like the next resistance zone, this being the 2nd highest peak on 30 Dec 2021 since SDR listed on 8 Nov 2021. This also coincidentally happens to be in the zone of the uptrend line resistance from the low of 28 Jun 23. Might thus be a a bit of a struggle to go past $7.00. Suspect it will bounce between ~$6.50 and ~$7.00 for a bit, which for the longer term, is a healthy thing to have happen.

Price is also not too far from SDR's all-time high was $7.77 on 9 Nov 2021, after which we will be in completely price uncharted waters ...

The next business update will be likely Jan 2025 when 1H results are announced as SDR no longer reports quarterly. Time will tell whether what is poured on this price fire from those results is kero or water!

Discl: Held IRL and in SM

Anyone aware of who bought so aggressively?

SUMMARY

A very good all round operational result - very hard to find fault with it as the business appears to have fired on all CURRENT cylinders.

Smart Platform new capabilities are being progressively rolled out in 1HFY25 - sets the foundation for a good step up in revenue in 2HFY2025.

Focus is now increasing on larger hotel properties vs SDR’s earlier focus on small hotel properties - this opens up the TAM, is a good sign of growing product/platform confidence and will support future revenue momentum given the higher Gross Booking Value of larger hotels

Am very bullish as things are falling into place very nicely.

Thesis of SDR being the dominant platform in small and medium-sized hotels is very much intact and in play with the existing capabilities, and with the promise of more from the imminent Smart Platform capability rollout.

Market does not seem to have recognised this and prices have fallen to my top up zone of ~$4.90

Topped up today at $4.92 IRL and in SM, with dry powder kept on standby to further top up around $4.60, if prices fall to those levels.

Disc: Held IRL and in SM, High Conviction holding

Financials (all amounts and %’s are YoY comparisons)

Total revenue up 26.0% to $190.7m - while this is shy of SDR’s “medium term” goal of ~30% annual organic growth, it has grown at a fast clip and is before new Smart Platform capabilities are released.

• Subscription revenue up 18.8% to $122.4m, driven by a 13.8% increase in properties of 5,400 to 44,500 properties
• Transaction revenues up 41.2% to $68.3m, driven by strong Transaction Product Uptake which increased 41.2% to 26,300 products
• ARR is up 20.7% to $209.0m
• Revenue mix is shifting slowly in favour of Transaction Revenue, from 68% Subscription:32% Transaction to 64%:36%
• Revenue was earned more or less evenly across all 3 regions of APAC, EMEA, North America

Margins have been sustained:

• Reported margin - 66.7%
• Underlying subscription GM improved from 83.2% to 85.1%
• Underlying transaction GM moderated from 34.8% to 32.0% due to product mix, temporary expansion into new segments and acquisition channels - no concerns on this

Underlying EBITDA turned positive from FY23 ($21.9m) to FY24 $0.9m, importantly, this occurred in 2HFY24, reflecting the benefits of operating leverage and cost discipline

LTV/CAC continues to improve on a steep trajectory - 31.7% improvement from 4.1x to 5.4x

• Customer Lifetime Value improved 8.3% from $22,312 to to $24,130
• Customer Acquisition Cost (CAC) improved by 18.2% from $5,469 to $4,472

Rule of 40 performance improved 230%, from 5 to 17, reaching 21 in 2H

Operating leverage is kicking in as revenue increases - this is very evident in falling product Development Cost despite the intense focus on developing and deploying the new Smart Platform capabilities in the back half of FY2023.

Balance Sheet

Underlying FCF improved from ($34.0m to ($6.4m)

• FCF as a % of revenue improved from (22.5%) to (3.4%)
• FCF positive was achieved in 2HFY24, generating $2.3m or 2.4% of revenue

$72.3m in available funds, which includes $30.0m of undrawn debt facilities

3-Pillar Smart Platform Strategy

Clear evidence that the SDR platforms are being actively used

The industry is coming onboard, including the big Global Distributors

New capabilities appear on track for rollout in 1HFY25 - expect revenue to get a good leg up in 2HFY25 as a result

Morningstar imitating with a $10 price target.

Same points made:

• $40M of cash and move to CF positive in FY25.
• Expect metrics to adopt that of a platform as the channel manager industry consolidates - SDR being the leader at double other market shares at 5% - natural winner (some risk this does not happen). SDR then becomes natural choice lowering customer acquisition costs.
• Attraction to hotels to use SDR due to operating leverage from incremental guests despite dominance of Booking.com and Expedia.

Wrote an article about Siteminder for arichlife. Would love to have another strawman meeting with CEO.

https://arichlife.com.au/an-introduction-to-siteminder-asx-sdr/

Good to know Aust Super is accumulating SDR, adding another 1%.

The Good

• Increase in positive operating cash flow to $4.9m for the quarter. FCF is still not quite positive due to investing cash outflows of $5.3m. Siteminder is trending well to meet their FCF target by the end of FY24.

• Operating expenses remain flat, so going forward, most of the top line growth should be going to the bottom line.

• $39.5m in cash available as the business reaches FCF positive. Cash balance should improve going forward offering a solid operational buffer for future R&D spend.
• 14 agreements signed on for Channel Plus which indicates there is a demand for the new product. Currently this is running in pilot for Q4FY24 so unlikely there will be any significant contribution from Channels Plus until H2FY25.

The Not So Good

• ARR is up YoY and the previous quarter but still down on Q1. It’s a similar story with quarterly revenue, which has been largely flat for FY24 and still down on Q1. For the company to be close to the targeted growth rate of 30% much of this will need to come over the next 2 quarters.

What To Watch

• Channel Plus and Dynamic Revenue Plus release as per target in Q1FY25
• Siteminder Pay Terminals rollout in H1FY23
• Updates on Little Hotelier Autopay and contributions to increase in transaction revenue.

Watch Status

• Unchanged. Slower growth QoQ but business developing opportunities for FY25 and beyond.

Valuation Status

• No Change

Board

Inside Ownership                   Ordinary Shares    %SDR Issued          Net Value at $5.40

Pat O’Sullivan                          65,976                         0.02%              $356K

Sankar Narayan                      7,147,691                    2.58%              $38.598m

Jenny Macdonald                    54,525                         0.02%              $294K

Paul Wilson                             16,760,807                  6.05%              $90.508m

Les Szekely                              15,549,072                  5.61%              $83.965m

Kim Anderson                         24,500                         0.01%              $132K

Dean A. Stoecker                    20,000                         0.01%              $108K

Total                                        39,622,571                  14.3%              $213.962m 

Recent Board Buying

Kim Anderson

·      28 November 2023

5,000 shares at $4.58 ($22,949.81)

·      2 November 2023

4,500 shares at $4.265 ($19,192.50)

Board Bios

Pat O’Sullivan - Independent, Non-Executive Chairman

Pat was appointed independent non-executive Chairman of the Company in October 2021.

Pat has extensive experience as a Director of both listed and unlisted entities. Pat is currently the non-executive Chair of both carsales.com Limited (ASX:CAR) and TechnologyOne. He was previously a non-executive Director of APN Outdoor (ASX: APO), iSentia (ASX:ISD), Marley Spoon (ASX:MMM), iSelect (ASX:ISU) and iiNet (ASX: IIN). 

Pat has over 30 years’ commercial and business management experience, including holding various senior financial and operational roles in Ireland, the US, Australia and New Zealand across a number of industries including traditional and online media, telecommunications, fast moving consumer goods and professional accounting. He was the Chief Financial Officer of Optus from 2001 to 2006 and was the Chief Operating Officer and Finance Director of Nine Entertainment Co Pty Limited from 2006 until 2012.

Pat is a member of the Institute of Chartered Accountants in Ireland and Australia. He is a graduate of the Harvard Business School’s Advanced Management Program.

Sankar Narayan -Chief Executive Officer and Managing Director

For more than 20 years, Sankar Narayan has delivered change management, operational rigour and business growth across the travel, technology, media and telecommunications sectors, with particular expertise in company transformations and business strategy to achieve strong shareholder outcomes. Following several senior management roles at ​Virgin Australia, ​Fairfax Media and Foxtel, and having also worked at Vodafone Australia, Boston Consulting Group and Schlumberger prior, in 2015 Sankar joined Xero where he went on to serve in the dual capacity of Chief Operating and Financial Officer.

Today, Sankar leads SiteMinder’s internationalised software and multilingual teams across 20 locations globally, and which see more than 80% of revenue sourced from outside the company’s home market of Australasia.

Sankar holds a Masters in Business Administration with Honours from the Booth School of Business at the University of Chicago and a Masters in Electrical Engineering from the State University of New York. He is a Certified Practising Accountant and a Fellow of CPA (Australia), and has been a regular contributor to Forbes.com on the crucial topics of strategy, disruption and managing high growth businesses.

Jenny Macdonald - Non-Executive Director, Audit and Risk Committee Chair

Jenny was appointed as an independent non-executive Director of the Company in October 2021.

Jenny has a background in financial and general management roles across a range of industry sectors including fast moving consumer goods, resources, travel and digital media. She has a proven track record in developing and implementing strategy with a focus on risk management, growth and value creation. Jenny was previously Chief Financial Officer and Interim Chief Executive Officer at Helloworld Travel and Chief Financial Officer and General Manager International at REA Group.

Jenny is currently non-executive director of Redbubble (ASX:RBL) and Australian Pharmaceutical Industries (ASX:API), and is Chair of Healius Limited (ASX:HLS).

Jenny is a member of the Institute of Chartered Accountants ANZ, has a Masters of Entrepreneurship and Innovation from Swinburne University and is Graduate member of the Australian Institute of Company Directors.

Paul Wilson - Non-Executive Director

Paul was appointed a non-executive director of the Company in 2012. Paul held the role of SiteMinder Chair from 2012 to 2018, and was previously Chair of the People and Culture Committee. He is a member of the Audit and Risk Committee.

Paul is a co-founder and Managing Partner of ASX-listed Bailador Technology Investments (ASX:BTI) (which is a substantial shareholder of SiteMinder). Paul’s business background includes positions with leading Australian private equity house CHAMP Private Equity in Sydney and New York, with MetLife in London, media and technology focussed investment group, Illyria and with Ernst & Young.

Paul’s other non-executive director roles include ASX-listed Vita Group (ASX:VTG) and Straker Translations (ASX:STG), as well as private companies InstantScripts and the Rajasthan Royals IPL cricket franchise.

Paul has a Bachelor of Business, from Queensland University of Technology and is a Fellow of the Financial Services Institute of Australia, a Member of the Institute of Chartered Accountants of Australia and a Member of the Australian Institute of Company Directors.

Les Szekely - Non-Executive Director

Les was appointed a non-executive director of the Company in 2012. He was the first angel investor in SiteMinder.

Les was a tax consulting partner with Horwaths Chartered Accountants for 20 years, until the company merged with Deloitte, when he became a Director of Taxation in Deloitte Growth Solutions.

Since leaving Deloitte in 2008, Les has dedicated his time to angel and venture capital investing. He is the Chairman of Grand Prix Capital, Equity Venture Partners and Microequities Asset Management Group Limited (ASX: MAM). These businesses are engaged in venture investment at the angel, venture capital and early listed stages, respectively. Les is also is a director of several venture backed growth companies.

Les holds a Bachelor of Law and Arts from the University of New South Wales, a Master of Laws from the University of Sydney.

Kim Anderson -Non-executive Director, People & Culture Chair

Kim was appointed a non-executive director of the company in April 2022. She is the Chair of the People and Culture Committee. 

Kim brings more than 30 years’ board and executive expertise to SiteMinder from a range of media and e-commerce companies. Kim is the former CEO and founder of Reading Room Inc (bookstr.com), CEO of Southern Star Entertainment, and has held senior executive positions at PBL and Ninemsn. 

She is currently a non-executive director of Carsales (ASX:CAR), Marley Spoon AG (ASX:MMM), Invocare Ltd (ASX:IVC) and Infomedia (ASX:IFM). She serves as Chair of the Remuneration, People and Culture Committee on all her boards.

Dean A. Stoecker - Non-Executive Director

Dean Stoecker is an American entrepreneur and businessman, who co-founded software giant Alteryx (NYSE:AYX) in 1997, a company specialising in automating analytics, which today plays a key role in making data-driven tools accessible at all levels of the world’s leading organisations. 

Currently Alteryx’s Executive Chairman, Dean was previously the company’s Chief Executive Officer. Prior to this, Dean was Director-Enterprise Solutions at Integration Technologies, Principal at Donnelley Marketing Information Services and Vice President of Sales at Strategic Mapping. 

Dean holds a bachelor’s degree from the University of Colorado, and a Masters of Business Administration (MBA) from Pepperdine University. He lives in Colorado Springs, Colorado.

Following the post on SDR's 1HFY24 results earlier, here is the summary of the SDR 3QFY24 Appendix 4C. More of the same from 1HFY24 ...

Very excited with progress on the 2 new capabilities currently in pilot release ahead of 1QFY25 release as this will propel SDR's next phase of growth, in parallel to the ongoing growth in the current base products.

Discl: Held IRL and in SM

KEY POINTS FROM THE ANNOUNCEMENT

• Revenue increase driven by SDR’s metasearch offering, Demand Plus, driven by accelerated adoption and strong booking activity
• Net subscriber addition momentum continued from 1HFY24, focused on larger properties (vs the target market of small, independent hotels)
• Continued improvement in FCF - underlying FCF was ($0.2m), now only (0.4% of revenue) - accelerating throughout FY24 thus far - continuing benefits of sustained strong organic growth and operating leverage
• Liquidity remains strong at $72.2m
• No change to FY24 guidance - (1) organic revenue growth of 30% in medium term (2) underlying EBITDA profitable in 2HFY24 (3) underlying FCF positive in 2HFY2024.
• On track for mid-CY2024 release of 2 Smart Platform products
• Channels Plus:
• Signed up Trip.com Group to participate in the Channels Plus Program
• Channel Plus continues to gain traction - 14 distribution partners have signed up
• Channel Plus pilot commenced 29 April 2024, limited to 1,000 hotels, has drawn strong registered expression of interest from existing customers
• Dynamic Revenue Plus:
• Mobile App launched in March well received by users

Belatedly worked through SDR's 1HFY24 results and last week's 3QFY24 Appendix 4C after leaving it aside for about 6M.

The FY2024 slides is an easy read and tells the story very clearly SDR 1HFY24 Preso

Added notes taken during the 1HFY2024 call and a summary of the P&L and KPI's across the halfs, so that I can more clearly see the trend across half's rather than pcp.

SUMMARY

• This is a company that is firing on all cyclinders today, with new capabilities in pilot release now, which will drive the next wave of growth from FY2025
• Positive momentum and operational KPI’s all steadily trending in the right direction and improved on the pre-Covid 2019 trajectory - subscriber growth, across all regions
• Scale and leverage is clearly showing as revenue grows - unit economics continue to improve, LTV/CAC continues to grow, Sales and Product Development expense as a % of revenue continues to fall
• Underlying cash flow positive in 1HFY24 - on track to target of cashflow positive in 2HFY24
• Driving industry change via Smart Platform - the integration of Distribution, Intelligence and Revenue Optimisation, as the hotel industry is far behind airlines in yield management
• Smart Platform will provide the next step increase in SDR’s growth - good progress made in 1st 2 capabilities of Demand Plus and Channels Plus - due for release in 2HFY2024, will full impact to be felt in FY2025 - increases the moat
• Smart Platform will also see more transactional monetising opportunity for SDR by taking a clip of the gross booking value that goes through the SDR platform
• SDR is rapidly growing its base market with a huge TAM to go and in parallel, rapidly building new capabilities that will drive improvements in hotelier revenue via improvements in yield management

KEY POINTS FROM 1HFY24 INVESTOR CALL

• Comparison CY2023 against Pre-Covid CY2019 a better indication of performance as CY2022 was Covid-distorted - unable to sustain acceleration rates when compared to a distorted 2022, but underlying growth from CY2019 is ongoing
• APAC and Aust - higher growth pace, expect Asia to grow scale
• Subscription growth momentum - good pipeline and additions in 2M in CY2024, no slowdown
• Transactions held up better than most majors:
• GDS - big beneficiary of return of leisure travel post Covid
• Pay - on par with average growth rates
• Demand Plus - strong ability to drive activity and share of Gross Booking Value - strong in Jan/Feb
• LTV/CAC is 5.3x - higher than pre-Covid, LTV has expanded and CAC continues to moderate
• Channel Plus Partners - signed on Agoda and Hopper
• Agoda is either top 5th or 6th of global channels, strong in Asia and is very big
• Channels Plus takes away friction from inventory management
• Both sides have monetising opportunity - SDR, Hotels, Online Travel Agent
• SDR is one of the largest supplier of inventory to the majors
• Channels Plus creates new distribution channels, is not part of Demand Plus - complementary, not cannabilistic
• Channels Plus - hotel has 1 pipe which opens many distribution channels - removes inventory management friction
• Pilot in mid-CY24, impact will be seen in FY2025
• Revenue growth is driving leverage and scale
• Positive Underlying Cash Flow in Q1 and Q2
• Not looking at M&A

Discl: Held IRL and in SM

As @PeregrineCapital pointed out, BTI's February Update is all about SiteMinder, which is their largest holding in the portfolio. BTI are still quite bullish given the significant portion it makes up of their NTA and for me, any sell downs from the BTI team would be worth paying attention to. (Even though they probably should to move capital into other unlisted ventures).

The update breaks down Short, Medium and Long term prospects for the company, but implies there is value at current levels.

I'm yet to do my review of Q2/H1 but will revisit this when I do.

Siteminder re-iterated guidance yesterday that it should be FCF positive by HY 24 as per previous guidance. Continues to revenue grow at 30%.

Putting this together, the pattern of buys from SDR directors and BTI directors (own approx 25%) supports the conviction in the company.

No suprises to strawpoeple, but the tech companies that have weather the past 12-18months and are at the FCF inflection point would be high percentage bets to be the first to re-rate

20% pop on yesterdays announcement, from 2.55 to 4.30 in the space of a month, although it seems to run-up above my original target, i expect a pull back over the next few weeks. Own in RL an SM.