If the company can continue its business momentum into the next few quarters AND continue to win some more contracts AND remain cash flow positive, or better yet, increase its operating leverage .... there is definitely an argument that there even with the recent share price surge there might be some good value in the company

Over the past two weeks, SenSen has won a couple of Canadian contracts with the cities of Calgary and Montreal. Not bad terms either and market has responded quite positively with the share price up 35% today (September 12).

Though there is some illiquidity and hence volatility which could explain some of the movement

I haven't looked at SenSen for a while, but their quarterly update today caught my eye.

Q4 cash receipts were down a bit on the previous corresponding period, but overall they have managed decent growth over FY23 with 27% growth in customer cash receipts.

The business remains cash flow negative -- missing aspirations to flip into positivity this latest quarter. Apparently several payments slipped into July.

They reckon they'll be cf +'ve in the current year. If sales momentum continues they'll likely avoid a raise, but with only $1.9m in cash and a $2m facility it'll be a close call.

Cost cutting continues, with a further $750k in annual savings achieved in the quarter. They expect more in the current year. Comparing staff and admin costs from the same quarter last year shows a 13% reduction, Manufacturing and operating costs (presumably mostly cloud and IT services) were down 24%.

Looking ahead, they are targeting 100+ enterprise clients in the first half of FY24, up from 85 at present. And there's a raft of new products/features that are now launched.

It's an interesting enough company (we spoke with the CEO in April last year if you want a good overview). Guestimating a P/S of around 3.5x which aint terrible if they can sustain the pace of sales growth and keep costs contained. (yeah, P/S is overly crude, but it'll have to do until we see earnings or even EBIT)

These guys were doing AI before it was cool, so maybe they'll get some hopium from that angle at some stage? But i suspect the market will want to see sustainable positive cash flows first. There's also an ongoing legal dispute with a former distributor that can't be helping sentiment.

I'd be a lot more interested if I could understand the competitive edge they have. My layman's perspective is that there are far bigger AI vision focused companies that could outcompete them, but perhaps they can carve out a profitable niche within areas such as service stations and casinos.

SenSen look to have posted a very strong 4th quarter result.

Full announcement is here but i'll past in the highlights:

Also good to see some cost controls will reduce the cost base by $2.5m in FY23 which, all else being equal, should see them get a lot closer to a positive cash flow situation. At present that have $5.8m in cash and are burning through $1.3m per quarter -- so a capital raise, or new debt facility, does remain a distinct possibility.

Looks like they won a bunch of contracts in the quarter too.

As a reminder, we spoke with CEO Dr. Subhash Challa in April, which you can watch here

Disc. Not held