Member Info for Brockwl

Given GM had first user advantage, and got rave reviews, I'm shocked they have only used our software in 80,000 cars to date.

It helps explain why our broker forecast auto KPIs have been continually downgraded. Given the company would have expected much higher sales than this.

Hopefully they finally get their act together and add significantly to the big uptrend expected in 2024.

S2020,

I don’t disagree that BMW should result in $22m a year revenue from Jan 2024, assuming we are in all new cars. Whether that transpires remains to be seen but for now I’ll assume it’s the case.

However, don’t start using Paul’s quote that its 90% profit margin, and use that figure as pure profit, and then try to base a market cap and share price on that. That a gross operating figure that is meaningless whilst we are non-profitable.

Currently the company has yearly costs of about $65 to $70m.

Fleet currently produces about $25m revenue and Auto $8m. Licensing and NRE probably about $10m. So, after BMW adds $22m in 2024 we are still not producing any profit.

Using your prudent 13x profit calc, 13 X 0 is ZERO.

The 90% Auto margin figure only becomes very relevant once we generate enough revenue to cover costs ie breakeven. At that point it is truly 90% margin for any sales increase and it all drops to the bottom line. However, we are a way off from that currently, but profit growth should accelerate quickly from that point.

First, we need to break even, which we should just about do in 2024. However, for that to happen we need the following minimum steps to occur.

1. BMW start in Jan 2024 and we are in all cars.

2. Fleet continues to grow at similar rates, of 12,000 per year.

3. NRE from Collins is reasonably significant ($5m)

4. Other Auto sales grow to produce 3m units sold in FY year 2024. BMW should be 1.1m of that figure given they will have only done 6 months at that point.

Anything else is a bonus.

Clearly for now the risks to reaching profitability are all around Auto. We should finish 2023 doing about 640K cars a year, ramping that to 3m in 2024 is a challenge, but what the company are suggesting looking at graphs from presentations.

However to date the presentations have suggested x sales, and the reality has always been less due to delays etc. It would be nice to finally see the company outperform the numbers they suggest.

I’m not expecting that from this upcoming KPI, but going forward it would make a world of difference.

David,

If only. It's a one off lifetime payment per new car.

Mapl,

I heard Paul say at least twice when pushed that revenue is 10 dollars a unit, plus 1 dollar per additional feature required.

These are not guestimates, but facts.

The only guesstimate is the number of features required per model. Until I'm told different I'll assume one feature per model for now making 11 dollars.

Remember features are relatively new, so may become significant further down the line, but suspect current roll outs don't incorporate them significantly.

Menon not wrong?

According to him we were in BMW from 2020 earning 30 US dollars a unit.

The reality is starting in 2024 and be 11 dollars if lucky.I

This is the big problem with this share, everything takes 4 years longer to start deploying, and revenue gets squeezed.

Great products, but the segment they operate in is a nightmare for lead times.

The market has correctly twigged this, and only proof of revenue, and profitability will result in any share price change.

If we are involved (which seems extremely likely) then its clearly good news.

However what does it mean in terms of earnings going forward, can anyone remember what Paul has quoted each FFS is worth to us?

When we announced the Collins deal, I seem to remember the company saying aviation and space could be worth $700m over 20 years.

Whilst that sounds a lot when you actually break it down its only $35m a year. No idea if this is revenue or profit.

But even assuming its profit, whilst its a nice contribution, it's not going to be a game changer.

What it will do in these early stages, is demonstrate that profitability is nailed on.

I'm expecting this Collins deal to generate a fair amount of NRE and help cover staff costs.

This should support the share price, until auto really kicks in during 2024.

If we are involved I'd expect an RNS fairly soon, as I doubt the Collins stuff has the same NDA limitations as Auto, given the exclusivity nature of the contract.

Here's hoping.

Looking at those and other indicators it looks like GM, Ford and Stelantis added an extra 180k car sales in Q2.

Our next , KPI figures should increase by whatever percentage of these we are in + any new models, + any new OEMs kicking in.

Unfortunately we can only guess what each of those are.

I would hope that a conservative guess based on the 180k sales increase would be 10%, giving us an increase of 18k quarter on quarter making 192k for the quarter.

Given the recent director buying I'm hoping for quite a bit more than that, but preparing conservatively to avoid disappointment again.

I suspect the following November KPI to have the bigger move once BMW kick in.

They are not. There will be key conditions, including a share price target. We just haven't been made privy to those yet.

You have misread or misunderstood the statement.

The annual report will contain the detail, but that is a couple of months away.

Nope he has 47m options.

New 10m + 12m + 15m rollovers.

However the 15m was part of a 25m 5 year package. 5m per year.

The last 10m still has 1 year and 2 years to go, so not rolled over.

So that needs to be added in.

Total comes to 47m.

So he now has 47million shares, as part of his incentivisation by 2026.

But we don't know at what price they become available.

I'm very happy for the CEO to be handsomely rewarded if the company is very successful. However 47 million shares is starting to look like a management with snouts in the trough.

Very annoyed at the roll over of options.

Phil, completely agree.

On top of that they haven't even disclosed the new price target.

Clearly embarrassed to do so.

Phil,

Hitting 1 million cars on the road milestone is a catalyst for the stock.

Your having a laugh.

I guess what this highlights, is that planes ordered today get delivered in 8 to 10 years time.

So where does that leave our revenue stream?

At what point does our technology get added, and does that mean the original contract financials needs tweaking, for that to happen?

We could still be 5 years away from air licence royalties.

Phil,

Couldn't agree more. Looks like synthetic data could remove the big advantage we had with our own data.

Technology now moving so quickly it's very difficult to stay ahead any more.

Which concerns me greatly.

S2020,

Thanks for the info, but happy to stay on the dark side for a while longer.

I'll assume 1.5m for BMW in FY 24 and 2.2m in FY 2025.

As Colin says won't be in every model until sometime 2024.

Ta

S2020,

You state "Every BMW coming off the production line now has SM tech on board via the Idrive system"

This is extremely key to the overall short term business case, and I really hope it is indeed the case.

If we look at FY 2024 with the above in mind, we should see the following using $10 a car.

2.2m cars from BMW = $22m

0.8m from others = $8m

Licence payments Collins and Magna $8m

Fleet $30m

Air NRE $3

The above is fairly conservative I believe and comes to $71m revenue, which should be very close to profitability.

Given the above is conservative as long as BMW really do put us in 2.2m cars then I think profitability is almost nailed in now, with the following year being even stronger .

So BMW have become very important in the immediate short term, and may be the thing that finally gets this moving upwards, when the KPI's start to show it.

Any idea when they first started to put us in every car? Must be fairly recent?

I certainty wouldn't read too much into it. It's taken 7 years to get to 50k. I wouldn't be surprised if it wasn't a typo.

I'll be happy for G3 to make a difference, but I'm just not seeing it.

Sure it's cheaper and easier to install, but will it really make that much difference.

Even those invested enough in safety to buy G2, take 6 months to install on average. Plus the first 50k should have been the easy sells, the next lot have ignored the evidence for the last 7 years and not bought.

I think setting 150k as next milestone is admirable but a total pipedream, which will come back to haunt him.

I notice that Ford have hiked the 3 year subscription price for blue Cruise from 600 to 2100 dollars. If you pay monthly it's now 75.

Customers are not happy and even Ford have acknowledged that.

There is a level where people just won't accept the cost. I certainty wouldn't pay the new rates and I'm a fan.

I can see automakers getting greedy already and causing a massive slow down in adoption.

This is worrying in the US as most of our early auto revenue will come from there and they don't have the same regulation time constraints dictated by Europe.

The 875k was for end March. We should be over a million now given we are averaging 60k a month and growing.

I guess they just haven't received the data for May yet so are only saying 900k.