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Tricky,
If only life, and business, were that simple.
Difference between net and gross margin businesses. This business model is great if you've got a great capital allocation model which picks winners, balance sheet / cash flow aligned to enable this across different royalty baring products in the portfolio at different development / harvesting stages.
Not so great if you carry on spending millions of $ year after year where your initial capital allocation has proven to be very poor.
Hull.
Posters are consistently overestimating the influence of a non exec no matter how good. They don't close deals.
Tevet still seems really thinly spread. All depends on the state and sales stages of the pipeline when he joined.
Still seem some way away from even one revenue stream which gives steady multi m $ annual revenue like tarana.
Had my eye on this and wanted to buy in the low 30s but no cash two weeks ago.
When I dont buy a share the share price increases, when I do buy a share it goes down.
As usual its a pity they dont split orders into base renewal, renewal extensions and completely new business - with the ARR impact.
Seems the Akamai service has yet to ramp so hopefully this should provide further increases in growth Q2-4.
But very positive from the very competent and focused leadership team.
Yes - nice to see further RNSs.
Key is what level of revenue is P&L (real P&L not EBITDA where they capitalise R&D and then take out the amortisation) breakeven point and cash sustainability.
Hopefully 100% focus on cash and bottom line. I can see Basu getting excited, loosing focus and mucking about with projects that suck cash.
Hull.
More negatives than positives - mainly that it still leaves tarana as the only real end user revenue stream in 24.
Tech business model is selling exactly the same product / application multiple times at very high margin, not playing around developing for individual customers.
Just hope the products they are part of are volume sellers.
Main hope h2 has a tarana order updating their existing estate with a software update - instant cash, instant margin.
Trickey -
Nice to see how I stated "key issue here is the 2.2-3 isnt product revenue, it engineering" has led further research - I thought I posted a pile of tosh? But good to be of assistance.
So why it is the key issue.
1. you cant extrapolate the 2.2-3 forward in any meaningful manner. So a further potential revenue / cash cliff Q1/2 25.
2. the money doesnt flow from an end user with the product in the field as royalty / product
3. it is a heavy investment from the customer, it will go through a lot of approvals and investment appraisal - hopefully with the statement of absolute numbers this is 95% complete - but the final 5% is always the pain in the backside.
4. still dont know whether it is an enhancement to an existing product which has a run rate for ENET, or a completely new product subject to launch. end user acceptance etc.
5. the enet product is not plug and play and therefore still needs work to ensure it works as part of this OEM stack, or future potential opportunities
6. Vs royalty or product the cash flow might be very backended or even 2025 (income can be recognised in accordance with work undertaken even if not billed)
7. Development / testing always takes longer / costs more than you plan for
Having said that
1. If they do get an order there should have been due diligence and an ROI evaluation from the OEMs that they can recover this amount from a given number of units in X time period.
2. Hopefully from a shareholder perspective it is effectively 100% margin with the costs embedded within the run rate DL has spoken about, not additional developers / testers on top
Correct, I have lost a lot of money here.
Too much reliance on what DL did with Broadlight and his direct confirmations to private shareholders which have proven simply a pack of lies and would have him out on his ear with an FCA investigation.
Realising DL lives in a bubble of his own making of products that the market doesnt seem to want, products post contract that customers dont want, together with what I have been told in first hand accounts of the chaotic way the company is managed operationally and strategically means this still not a company where any reliance can be made on RNSs and company communication.
Jimbob.
You simply seem incapable of stating your view of the facts, the risks and opportunities and a balanced view, just grunting.
So it's engineering, so a "product" that doesn't yet exist where the market is uncertain. Hopefully into existing product lines with companies with similar product lines and customers.
Remember this product line was meant to be ready over two years ago and ready for volume shipment in Q123, so two years late. I remember the RNS stating they were opening a book for advanced orders!
Trickey.
In the forward looking statements this is terrible.
I queried whether they were now taking smaller orders this year (which irrespective of size I stated should be an rns as it shows full year implications) as they had used up last year's supply.
This confirms they havent. So run rates on the only reliable revenue stream for the year deeply uncertain.
So H1 revenues now smaller than my local cornershop, cash balances rapidly reducing.
You have to go back to the sheer stupidity and ignorance of DL stating all the cash will be used for operational purposes, not paying creditors their quarterly due.
Year in review.
- Achieved about 40% of their minimum revenue they effectively guaranteed at the start of the year.
- Complete failure to plan both revenue and balance sheet.
- Moved from multi million backlog to effectively zero with all post ipo product contracts either cancelled or uncertain.
- Massive dilution with share issue, including directors using shareholders equity to prevent Bergen taking action against directors.
- Remaining institutional shareholder, miton, finally loses patience after backing every raise and sells out. Shareholder base now traders.
- Private shareholders have to take control of the AGM, chairman confirms he doesn't understand the disaster Bergen deal which he signed off.
- Continues the disastrous performance since ipo.
Yes - all retrospective.
Now 30% through 2024 and no new contracts, but as usual lot of promises. Share price based on the assumption the BOD and SLT will continue to perform very, very poorly and not execute.
Two interesting elements of the report. A side swipe at MR that they now have a "professional" cfo. The number of board meetings.
Jolly - just you and me here !
My 250k shares just tucked away. Was going to add when the non exec did but no spare funds.
Hope for an overall rerating of small caps, dont know what the US listing will do (I did see the CEO was booked at some investor conferences in the US), strong balance sheet and no need for a raise.
I still think a possible takeover target, chicken feed for a nasdaq company and earnings accretive.
Hull.
A decent tech sales person working in s/w / h/w in a Nasdaq / nyse company would be on a base salary of about £100k and a further £100k on target comm. Add to this direct cost of pension, NI, expenses, car allowance. I used to know all these across EMEA for each country.
Usually you get a chunk of options each year on top with a standard vesting over 5 years at 20%. So if you’ve been there 5 years you’ve a nice chunk of unexercised options effectively “in the bank” so you’re not going to go to ENET with their risk premium, hence why the new VP was not in employment.
Hull.
This isnt correct.
She joined as Finance Director and was promoted to VP finance., this at a time a CFO and VP of finance for a company with a $1.5m turnover, I think my local Greggs does more than that.
As I have said key appointments are front facing, hard nosed sales - in finance you just need someone to ensure the basics and statutory / tax stuff is complete. Decent sales people should be $300-400k all in but are worth their weight in gold, issue is it takes someone 6-12 months to get productive so a cost to the company (as they would have guaranteed bonus at 100% for 6 months) and its very difficult to recruit good people to a company such as ENET especially if they are nasdaq and have options in the blue.
Prophetus - many thanks for engaging in the correct manner.
1. Whilst Covid may have caused delays, it appears these contracts are dead in the water and ENET left holding the can due to poor contract management.
2. Two new non execs are 100% better than the last two. CFO just a book keeper. Ilan looks and sounds the part, but very different coming from a company where you can point to customers, market share, gartner reports to ENET.
3. I really hope so, but history really doesnt help either of us here.
4. You have undercooked this one, especially if there is a similar BEAD type funding in India.
5. I think if you did the classic Boston Matrix MBA cobblers, some squares would be fuller than others. It really is hard to sell when you have ENETs financial history if you want to embed products in a stack.
6. Correct and give him his due he has done this at 10 / 20 x where they currently are. However he lives in a bit of a tech bubble of his own making and sees things through a very narrow prism.