Member Info for LawrenceHut

3) From the materials and discussions in calls and interviews, I understand that the insurer pays $60 within 30 days of signing the contract, and then $5 every month after the 12 months have passed. There is no separate billing for the device, and it's all expense at delivery (which is why margins are negatively affected).

I just don't think the repair costs are that high. Or these numbers might be correct in a state where Ondo just entered, but they will go down as the number of customers increases. That's why growing as quickly as possible is important: cost per unit should go down.

Check p32 of the last interim results : https://wp-ondo-2021.s3.eu-west-2.amazonaws.com/media/2024/12/Interims-Sep-2024-VF-Published.pdf.

That's what I tried to explain with an example in an earlier comment.

Thanks Andii, I hadn't seen that tweet!

Yes, he didn't quite grasp everything. I thought it was interesting to peak at the content of Dowgate's document.

He didn't understand that repair costs were indeed the plumbing costs. I think Dowgate costs are too high (well, I hope): Ondo's management indicated gross margin would be 70% at Y2+, 80% in the long run, so these costs seem too high (I know Craig can be over-enthusiastic and over-promise, but that would be a straightforward lie).

I don't think he gets how the new model impacts EBITDA. The faster the growth, the lower the margins in the income statement, but the higher the operating cash flow, so great!

Runrate EBITDA could be positive from March'26, but if growth really kicks off, it could show as negative in the income statement for several semesters (or even years if growth is really really fast). That's also why it's hard for me to model the current "runrate" EBITDA; I'm not sure what the margin is on Europe contracts, because it's "hidden" by the very low gross margin in the US in the account statement of FY2025 (because many devices were installed in the last semester, and even in the last quarter).

1) I agree. In fact, Craig explained clearly that one of the reasons to focus on the US is that it's easier for insurer: it's worth it for all houses.

2) I think it's a decent question considering the distances.

Supposedly, ~10% houses receive a visit from a plumber in the first year (from Hugo Navarro, but I think it's much higher, from the numbers they gave), so if it's one plumber for every 5000 houses, that's 500 visits for one plumber; in 250 labor days, that's 2 per day. It sounds very doable, even with long distances. Some days 1 visit, some days 3 or even 4 visits.

If the salary is $100K, that's $20 per Leakbot the first year, $33 if it's one plumber for 3000 houses. Add a bit of app and equipment costs and $30 for the device, and you get the "near break-even or slightly loss-making in year one".

So all plumbers in-house seems ok, and $45 costs definitely seem to high even in year one. I think it's worth having in-house plumbers that are specially trained for that: it adds value and makes it harder to replicate the model, I think.

Sorry, I had missed it.

I also just found this one from the end of August: https://www.youtube.com/watch?v=qlDThxDt5aM.

The guy was just discovering it, so he didn't get some of the info, but what's interesting is you can see some of the comments from Dowgate Capital.

Their estimate for costs are higher than I'm expecting. I really hope they are wrong.

I meant "bullish" as in bull-ish, I guess autocorrect changed it to something less palatable that warranted some **** characters

upthemost, great for you, but many here are trying to understand where the company is, where it will be in the next few months. to try to understand the value of the company. value matters, time matters.

in my case, it helps me size my position accordingly.

judging by the comments, others are interested in the current or short-term situation. look at earlier comments, and you see people saying how positive ebitda is imminent, how growth is exponential, how the company is going to have £12m recurring revenue by year-end. spoiler: the latter is obviously extremely unlikely - you'd need to add 145k customer on $5/month contracts in 2026 for this to happen. i'd love it, but we added maybe—maybe—36k in h1. and not all of them on $5/month contracts, presumably. will we add 109k in h2?

(1) i don't want people to build unreasonable short-term expectations and then be furious when it becomes obvious these expectations were unrealistic, they'll be furious, sell their shares, and lose a ton of money. how do you react if you expect £12m irr by march and you get £7m (and i'd venture it's probably going to be lower, unless the next 4 months show an acceleration—which i obviously hope)?

(2) i'd like to have interesting, serious discussions, including number-backed. not just discussions with fan-boys who will interpret every point as bull****, but people who will judge this company in an honest way, even if they are enthusiastic about it. that's how you make money reliably.

Https://www.youtube.com/watch?v=Wn9_sX1LMp4

FYI, a discussion with Craig Foster and Sasha Baigent, Innovation Lead at Southern Water.

Expon3ntial, this is bullish the IoT sector, but not Ondo specifically.

In fact, it could be a slight negative vs devices that can measure flow, because they also inform you on water consumption, which Ondo's Leakbot cannot do (but anyways, water meters are being replaced by smart meters, albeit slowly).

I am also enthusiastic in the long run, but I don't dismiss the hurdles on the way. I think find&fix is very important part of the value proposition and part of the good ROI for insurers. And it's not that easy to replicate; Ondo can leverage its HomeServe background.

It's very dangerous to invest a lot based on vague idea. And so far, Ondo doesn't seem to accelerate as fast as it could (or even as fast as it guided, I think).

And the longer Ondo takes to occupy the market, the higher the risk that competitors will react.

Badtrader99

How do I have an obvious negative bias when I clearly described my position in the company (I'm invested, small-medium position), why it's this size, and what I hope for the company (big uptake in clients leading to a company worth much much more than it is)? Simply because I see that the customer acquisition rate has stalled?

I registered on this forum because after browsing through it, I was hoping to find people who are invested in Ondo and are keen on looking at the company honestly—to see what I'm missing, to question my sizing, mainly.

I saw that here as well people were disappointed by the poor guidance of Feb; I thought that it would have taught people to look at numbers with a critical eye and be careful with management's... "enthusiasm."

However much I love Ondo, it's a small company (although it's backed by not-so-small HomeServe), it's monoproduct/service (although I think that they could potentially develop find&fix even with other sensors), and it's not making a profit yet (although FCF should be positive if they grow fast enough—I even explained that growth is actually good for CF because it finances WC requirements). It's not derisked yet.

So I'm "kicking the tyres", as Expon3ntial said. My money was earned after years of hard, long work, some bad and good luck. I like to take care of it. And i happen to enjoy understanding a business, being aware of its potential and its risks.

Andii, thanks, but I'm not a UK person anymore. I have my own estimates; I thought other investors would have them as well. I was curious to compare our notes.

I'm curious to know what are people's estimate for number of registered users and revenue & runrate EBITDA for H1 and FY2026.

Who dares to put forward some estimates?

Feel free to add any number you think is relevant.

Interesting document about Ting, thanks.

Which figure would the inventory skew?

Inventory was 578K at the end of FY2025, vs 649K the prior year (note 7).

If you look below, in note 8 (trade and other payables), you can see the jump in Deferred Revenue. This is for service that was paid for (Ondo received the cash) but not yet delivered; basically the months of subscription paid in advance. It will be recognized as revenue in FY2026 (but there will be no movement of cash).

"Finally, you may be disappointed in the roll out but I think k we have a number of outstanding orders to fulfill which could spike the deployed unit numbers very near term."

It could. Hopefully it will. All I'm saying is that it hasn't yet.

Expon3tial. Thanks, and I agree about the one-product company, but this is more a long-term problem, I think (although a bundle with Ting and other devices might help gain clients, it's not necessary). If they reach 1 million customers on new contracts within less than 7 years, the shareholders' IRR will be pretty good. I'm still hoping earlier.

The fact that some insurers force a shutoff valve is a more current problem, but even this, insurers will soon realize that this is not worth it vs Leakbot, unless maybe some high-value houses. Maybe.

And in the worst case, if shutoff valves become more and more required, Ondo could still have a business with find & fix, I believe. Even without the Leakbot (although this is obviously not my ideal case). Not sure, but they could make a decent business, probably with smaller margins, but still decent.

Andii, high growth would give you negative margins on the income statement, but it would be good for cash flow. In fact, that's the great thing about the new scheme. Insurers pay the 12 month immediately (well, 30 days), so Ondo gets the cash. In H2, operating cash flow was less negative than in H1 thanks to that (it's still negative because admin expenses are still high, relatively).

High growth does not give cash flow problems for Ondo, on the contrary. Let me explain with an example:

So for say 10K devices that take 6 months to be installed from Oct till Mar in Indiana:

- Insurers pay 600K on Nov 1 - cash up by $600K

- Ondo sends the LeakBot - say $30 per Leakbot: cash down by $30K. ALL of this is expensed (so –$30K in the income statement).

- Ondo hires 2 plumbers in Indiana : 100K cash down (2 x 6 month of salary, taking your figure) and –$100K in the income statement).

- say each device is used for an average of 3 months in FY2026 (some 6 months, some 1 month, etc.): 3 x 5 x 10K = $150K goes in the income statement. CF statement not impacted, the whole $600K was paid already in Nov 1.

- the remaining 600-150= $450K is recorded as deferred revenue (in trades payable).

So you have in the income statement: 150K – 30K – 100K = $20K gross profit.

So gross margin is low in the income statement but in terms of cash flow you have:

600K – 30K – 100K = 470K. Woohoo!

Next year, of the 12 months, on average 9 months are already paid (so during the first 9 months, income is registered, but no cash flow enters; instead the deferred revenue line goes down in the balance sheet), so Ondo will only receive 3 x 5 x 10K = 150K for those 10K devices. +150K cash.

But they will register 12 month of revenue in the income statement : 12 x 5 x10K = $600K.

They'll spend about $200K in plumbing costs, probably a bit less as the number of leaks go down and they need less than 1 plumber for 5000K devices. But say $200K. –200K in cash, $200k as an expense in the income statement.

So roughly : income statement says 600K - 200K = 400K gross profit.

cash flow : 150K – 200K = –$50K. Negative in the second year. But remember that it was +450K in FY2026, so this is cash flow positive all along.

This is simplified (probably need to add some app costs and the staff receiving communications, probably a bit more than 1 plumber for 5000K in the beginning, Leakbot might be a bit more expensive given shipping costs, or maybe it's cheaper, etc.) but that's the gist. Even if you take 1 plumber for 300K (say in a new state), you stay cash-flow positive.

Look into the last statement: deferred revenue went up a lot. That's revenue that was paid to Ondo but service was not yet executed.

Margins went down, but cash flow consumption slowed down as well (about 1B in H2 vs 2B in H1).

So accelerating does not mean a capital raise will be needed; on the contrary. That's the whole beauty of this scheme. Insurers pay for working capital requ

Andii, it's from August 2023. The new scheme had just started I think, they are discussing it and are modelling unit economics with it.

They were expecting ~600K customers by March'26 (look at p6 and 21). Obviously, this will not be reached, not even half.

Again, I'm still an investor, because I believe the potential is there. Because the device is cheap and good enough and because I think the find & fix is a major point that will help Ondo win over the competition. Whether you like it or not, Phyn, Flume and Flo by Moen are competition: you either get a Phyn plus or a Leakbot but not both. I think insurers will like the Leakbot offer more because of find & fix.

Again, they are not increasing their numbers quickly either. Phyn seems to have a bit of traction but still add customers at half the rate as Leakbot or less, and it likely includes the small sensors (which I think will be displaced by Leakbot). i think some insurers in California require a shutoff valve, but this is not he case everywhere, and I'm counting on insurers realising that Leakbot + find&fix is a better ROI than an expensive device.

Andii, there are ways to see the number of registered customers, and I don't see the rate has increased. I might be slightly off, because there is some extrapolation, but I don't think we will be much higher than 200K customers when the call happens, likely a bit below 200K.

Again, I still love the company, I'm pretty sure at some points numbers will go up, I have big hopes in Nationwide, particularly.

But we are not there yet: don't put your hopes to high in the short run, size accordingly, else you'll likely be disappointed and you might even sell at the worst moment.

I don't see how we can be profitable by year-end. Obviously not accounting-wise (but it doesn't really matter) because margins are "artificially suppressed", and not even on EBITDA. Hopefully, Q4 will see a great acceleration, or I'm wrong in reading the data, but I don't see it so far.

Still, working capital is taken care of, that's a massive step. Now it's a number's game. You need gross margin to be at least as much as admin expenses. And for this you need a. lot of customers.

I think that if someone doesn't own any shares, they are making a mistake: the risk/reward is amazing. So if you don't have any: strong buy until you have a small/medium position in my non-professional opinion. But it's not derisked yet, there is bottleneck to pass. So don't put too much of your portfolio in it. That's my view.

I don't want to spread "fud", I want people to be well-informed. I want to discuss with people who understand the company, so I'm trying to point out things that might not be obvious to everyone.

Andii, it depends on your window. I'm just saying that:

- in H2 of last year, we added 151-114 = 37K registered customers

- in H1 of this year, we added 187-151 = 36K registered customers (I took 157K because we were at 155K on ~Sept 22).

Since then, it looks like it hasn't accelerated.

So that's more than a year at the same rate (obviously not fully smooth, it looks like Jan-Mar 2025 was the peak).

It's nothing catastrophic, it's faster than Phyn (although its rate of acquisition is increasing, but it could be mainly for these crappy humidity detectors), Flume, and maybe Flo by Moen (but I'm not sure). And Nationwide is only testing Phyn Plus in one state and only for high-value homes. So no killer in the competition. I believe the find & fix service is a real plus.

I know what 70% YoY growth is, but precisely, if we continue at 6K/month, this is a 47.6% growth at FY26, 32.2% at FY27, 24.4% at FY28.

We do not even need 70% growth for this to be a great investment. But we need to increase the customer acquisition rate.

Others: I'm not being antagonist. I'm a shareholder. At the current price, if growth does not go up but does not go down, this will be a mediocre investment but with a positive return over time. I'm fulling counting on the rate of acquisition going up.

Craig has overpromised in the past. And I think he has overpromised again. Happy to be wrong.

I think it's a great investment because downside is fairly limited (acquisition rate would have to go down), and the option (acquisition rate increasing to 9K/month or higher, or let's dream, Ting-like numbers) is wonderful. But for me it's a small-medium position and I'm ready to pounce on it heavily if numbers improve, but so far this rate has stalled and it's likely there will be volatility, especially if bulls think we are further than we are. So I qualify this as a "weak buy" (and I note you all have "no opinion").

Just look at Bloompoint's analysis on Ondo's website and look at where we are in terms of registered customers compared to what they envisioned.

Just be aware of where we are, or you might be surprised if numbers are disappointing and/or Craig explains that actually, runrate EBITDA will be positive only by Sep26. I don't want extreme volatility, so I want my fellow shareholders to be informed.

And mainly, I'm looking for arguments from well-informed investors to avoid me staying in an investment that is not worth it. For this, it's important that as many people as possible have a realistic look at this company.

Yes, it's impressive, but since March (which is more like 151K), we've been adding at 5–6K/month.

Say 6K: we will be slightly below 200K by the end of Nov, 223K by the end of March, or 48% growth. Not bad, but it still needs to accelerate. It's the same rate (lower, in fact), than H2 last year.

That's the hope, but I do not see the snowball effect in the numbers yet.

But as "Symmetry" said on X, "the best evidence of product market fit is when existing customers keeps expanding the scope of the agreements.".

Of course, revenue this year will be much higher than last year, and so will be "embedded gross margin", so to say (actual margins might be low if growth picks up in the last 4 months, because the LeakBot is fully expensed at registration).

We CAN compare to Ting in this case, because clearly the bottleneck is not plumbers deployment, else Craig would talk about it. The bottleneck is customer acquisition, and if anything, Leakbot may have an advantage: the customers who already have a Ting device and are happy with it should be more readily inclined to order a Leakbot. But then more people are aware of Ting, I guess, so word of mouth helps it. And there is no alternative, whereas LeakBot has Phyn, Flo, Flume...

But yeah, Ting is in all states, while Leakbot is in half of them (and not in the most populous ones).

Anyway, we can do better, and for this company to be worth more, we must. I believe it's fairly likely we will. The sooner the merrier.

Yes, and I think that he's correct when he says that partners are motivated. At least Nationwide does seem very motivated from all the communications we've seen recently.

He did talk about targeted advertisement on Facebook, but I guess the insurer does it rather than Ondo?

So far, I don't see that it has translated into an increase in rate of acquisition. Unless the data I'm following is not accurate, I think they hover at 5-6K/month globally.

Sure, I'm a buyer at this price. Even if growth stalls at 6K/month for the next few years, IRR will be mediocre but positive for us. That's why it's a weak buy from me at this price : I have a medium position, but I'm waiting for some acceleration to add more.

And I believe they can do much, much better than that. Something is preventing Ondo to ship more LeakBot. Not sure what, but I bet it's slow uptake from customers (Ting customers are added at 6x the rate of new Leakbot customers). Which is why I'm wondering whether Ondo could/should experiment with local, targeted advertising in a few places to kick start adoption — and then word of mouth should do the rest. They should target places where, say, Nationwide has a high density of customers and where Ondo has enough plumbers.

As Craig said, we only need one insurer, let alone two, to really do things well for Ondo to become a really big business.

"Shipped". There is a lag between shipping and installation, and not all devices that are shipped are installed.

The document also says "Registered customers are now approximately 185,000, with the US now representing 30% of our total registered customers"

185 * 0.3 = 55,500 registered customers in the US.

185 - 151 = 34,000 registered customers added between March 31 and the AGM meeting (assuming they took the numbers on that day). And it's probably a bit less than 185K, I would bet.