Vista Group (VGL.ASX) reported their FY25 results last week. From their presentation (note these figures are in NZD):

A record result and a return to profitability on an NPAT level. VGL is on a transition towards 100% subscription revenue. Currently there are around 1500 sites live on the Vista Cloud platform which is around 35% of enterprise clients and the company is investing heavily in the next few years to accelerate the transition.

VGL hope to achieve around 2000 sites live on the Vista Cloud platform by the end of FY26.

On an ARR basis, VGL actually missed guidance which was already downgraded to $165-175m finishing with $163m. Management noted that this was due to some reclassification of revenue which was more transactional rather than recurring to align with stricter reporting standards. There was also more focus on quality over quantity with large scale migrations for larger customers being the focus for FY25 which may take longer to reflect on an ARR basis but provide much longer lifetime value (LTV). Furthermore, the ARR not recognised in FY25 has been put into a backlog for FY26 and has not been lost.

On the call management spent some time talking about the new Vista Payments platform which is embedded within the cloud software. At current it is only on trial with a few clients but they expect it will add around $15m ARR at scale although they did say this may be on the more conservative side given the large GTV that goes through the platform, they hope that they can capture a bigger clip with this payments platform.

Guidance for FY26 was given:

• Revenue Guidance of between $176m - $182m reflecting around 10-13% growth
• EBITDA margin improvement to a 18-20%

The aspirational 100% platform target was also given a time frame of 2030.

Running the numbers through, should they hit their targets, we could expect around $104m - $116m EBITDA in 2030/2031. Being conservative, this could translate to around $50m NPAT.

Disc: Held IRL and on Strawman.

Vista Group Limited (VGL.ASX) reported their 1H FY25 results last week. From their presentation:

Metrics are all moving in the right direction. 1H is usually seasonally the weaker half so good to see good growth compared to pcp. 2nd consecutive quarter of FCF+ although I'll talk more about this below.

VGL are in the process of migrating their customers on to their new cloud offerings which should see more recurring revenue. They aim to be at 1600 sites by year end which would represent around 36% of their clients. Listening in on the call, they mentioned that they believe this process of migration will be a 5-10 year operation. Currently they do not have enough staff to meet the demand from their customers to complete the migration and are actively increasing their spend in order to meet demand. They believe in doing this extra spend they can make this process closer to a 5 year project rather than 10. However they are currently trying to balance being cash flow positive with spending extra to meet demand from clients. Personally I would be happy for them to have negative free cash flow if it means that they reach their 100% platform targets earlier.

Guidance was given for the full year perhaps on the weaker side with also a small downgrade to their projected ARR targets. Management mentioned that although ARR guidance is unlikely to be hit, the customer that was delayed will not affect revenue guidance too much. There was also a small increase to the aspirational ARR target with a new Embedded payments platform included in their cloud software. I'm not sure how much value this will add but time will tell. They also did mention that there was potential for them to branch into other entertainment businesses such as kids entertainment centres. They are already using their software for some clients who have both cinema and kids entertainment centre on the same site so they know that their software is compatible with these types of business'.

Overall I think the result was solid albeit with weak guidance which has hurt the share price slightly in the days since the report. However this is a business that is just hitting an inflection point and may see good profit growth for years to come. As long as the cinema industry keeps on keeping strong for the next few years.

Disc: Held IRL and on Strawman.

Vista Group Limited (VGL) reported their 1H earnings last week (they report on a calendar year basis). From their presentation:

The 1H results were impacted negatively by the writer's strike which also affected their non recurring revenue segments. As a result, full year revenue guidance was slightly downgraded although EBITDA margins were upgraded.

Listening in on the call, management have mentioned that they believe the guidance provided is on the more conservative side which may explain the recent broker upgrades and subsequent rise in share price since results were released. Couple that with a fairly illiquid stock and the share price has rocketed.

The slate of movies that have been announced is encouraging for the industry as a whole. And I would guide everyone to look at what was announced by just Disney in the past 2 weeks at San Diego Comic Con and D23 expo.

Of particular interest from the presentation was this slide which shows what they are targeting to achieve in terms of their cloud platform.

If Vista Group can deliver on these targets, then along with hitting an inflection point and operating leverage, could see the company become profitable again in FY25 and beyond. Management did say that at this point it gives the company options in terms of how it wants to continue the business long term and it was focused on hitting these targets first.

Disc: Held IRL and on Strawman.

Vista Group Limited (VGL) reported full year results last week. From their presentation (note figures are in NZD):

Total revenue hit guidance provided although it was slightly on the lower end. EBITDA was also very strong for the 2H finishing at $13.3m which was above analyst expectations of $12.5m. Likely driven by the strong 2H movie slate which included Barbie, Oppenheimer and the Taylor Swift Era's tour movie.

VGL are in the process of moving their clients onto their cloud offering and converting to a SaaS platform. Currently Saas revenue only represents around 30% of total revenue although close to 90% of revenue is recurring in nature. Listening in on the call it seems that most customers are favouring this transition to their cloud product although there has been some unexpected churn.

Outlook for FY24 was given:

Management expect stable expenses so expect EBITDA of around $25-30m for the year. Still unlikely to be profitable until FY25.

Disc: Held IRL and on Strawman.

Vista Group Limited reported their 1H FY23 results last week. From their report (note figures are in NZD):

Overall I thought the results were fairly disappointing although on the call management did say that they would be second half weighted (take with that what you want). This is a company that is trying to turnaround in an industry that has suffered massive headwinds in the last few years whilst at the same time also trying to convert their business into a full SaaS model.

I can see where management are coming from in terms of the 2nd half weighting given that the whole "Barbenheimer" movement didn't occur until July and so any boost in earnings from this event wouldn't be seen until the 2H of this year.

Analyst forecasts have total EBITDA of $12.5m for FY23 and this was asked of management on the call who kind of played a straight bat and said that "that's the analysts' job".

Outlook remains unchanged with FY23 revenue guidance of $142-$147m and the company expects to be free cash flow positive by Q4 FY24 (15 months away). The company burnt around $9m for the half so there should be enough cash to sustain them through towards Q4 FY24. Although there is also $18m of debt on the balance sheet.

Price action was a bit weird on the day of results with no trades going through on the ASX even though the shares trading on the NZX were hit hard. In the last week shares have come back around 17%

Disc: Held IRL and on Strawman.

Business transformation to accelerate strategy and Q4 2024 free cashflow

Announcement by Vista Group that they are going to align the group's business' under the one umbrella which will simplify the business as a whole. This will result in a reduction of the global workforce by 6-8% to be completed by the end of 2023.

Free cash flow positivity is expected to occur 12 months earlier, in Q4 2024 due to changes in its capex program which is now expected to occur over 4 years compared to 2 as was announced earlier. Guidance for 2025 remains unchanged with ARR of between $175m-$205m (NZD) with EBITDA margins of 15+%.

Full announcement here

Disc: Held IRL and on Strawman.

This was announced to the market late last year but just catching up since I've been on holidays.

FY22 Revenue guidance has been increased to $131m - $135m NZD ($120m - $123,5m AUD). Part of this was due to an agreement with Cineworld Group who have agreed to pay Vista Group amounts owing prior to filing for Bankruptcy. They will also continue to use Vista Group software going into the future.

Revenue is still below pre-pandemic levels but Cinemas and movies seem to be on the road to recovery (Avatar 2 recently passed $2b in box office revenue) and the re-opening in China is bound to give the whole industry a boost as well.

Full year results to be announced on March 1st, 2023.

Full Announcement here

Disc: Held IRL and on Strawman.

Vista Group held their AGM yesterday and whilst I haven’t had a detailed read of everything just some quick updates:

• ARR now at 100m as of April (was $80m at the last results)
• Revenue seems to be higher than expected due to higher than expected movie goers especially for the latest marvel movies
• Movie studios are back to releasing flicks at the cinemas, Universal pictures is releasing 30 movies this year compared to 15 last year
• Vista China is under watch given current lockdown status

Disc: Held IRL and on Strawman

Vista Group (VGL) released their FY21 results yesterday. Note, figures stated are in NZD. From their release:

• Revenue of $98.1m (up 12% on 2020) within guidance range
• Recurring revenue of $81.4m (up 24% on 2020)
• EBITDA profit of $6.5m, improvement of $17.9m on 2020
• Positive 2H21 EBITDA excluding expected credit loss and foreign exchange of $1.3m
• Positive operating cashflow of $11.3m, up 277% on 2020
• Cash of $60.4m, up $2.3m from 30 June 2021. Net cash of $43.6m

I think the results are solid given Covid headwinds (and potential structural headwinds). Personally I still enjoy going to the cinemas to see the latest blockbusters but can understand the shifting nature brought on by at home Streaming and the acceleration of this during the Covid pandemic.

Management have guided for a 20% revenue increase for FY22 ($118-123m). The company is also starting to shift customers across to their new Vista Cloud platform.

Disc: Held IRL and on Strawman

This was released last week and was not market sensitive

Vista Group Announces Expansion with Odeon Cinemas Group into Spain and Portugal

Vista Group International Limited (NZX & ASX:VGL) is pleased to announce the expansion of its relationship with the Odeon Cinemas Group through the signing of an agreement to implement the Vista Group solution for Cinesa Cinemas in Spain and Portugal.

The solution provides cinema management software, (‘Vista Cinema’), a reimagined website and mobile App (‘Vista Digital’), big data analytics and targeted marketing (‘Movio’) and real-time distribution of digital media assets (‘MX Film’). The first pilot site went live just before Christmas 2021, and the implementation (42 sites in total) is expected to complete before the end of 2022.

Kimbal Riley, Vista’s Group CEO, commented “Odeon Cinemas Group, part of the AMC Group, is the largest cinema circuit in Europe, and it’s very pleasing to see that, even with the impact of the pandemic on the film industry, our partnership continues to expand geographically, and develop and deliver new ways to enhance the moviegoer experience.” 

Disc: Held IRL and on Strawman

Just realised I'm the only Strawman holder of this Stock.

Vista Group do software for the film and cinema industry. They have been hit very hard by the pandemic and the long time closure of cinemas around the world due to lockdowns. There is debate as to whether this is structural with the increasing amount of content being released onto streaming services. Nonetheless revenue and profit have been down for the last 2 years since peaking in FY19.

VGL released the following on 22/12/2021, reaffirming revenue guidance:

"Vista Group confirms that it remains on track to achieve its revenue guidance of between $95-100m for the full year and to be EBITDA and cash flow positive over the second half of the year."

The expected revenue is still well down on FY19 figures of around $180m revenue and profit of $10m. And time will tell whether cinemas will be able to recover back to pre-pandemic levels.

Disc: Held IRL and on Strawman.