04-09-2019, 08:29 PM
Thanks for answering, I think that is very narrow. These services normally require some adaptations to customer's needs and a first effort to integrate paretum's technology with that of their clients. I would include Product development (at least partly) $3M, most of the sales and marketing $3.16M, some of the general and administrative $17M, $7M increase. Cost of revenues are mainly recurring for the whole life of the deals.
For FY2018 I'd say almost $10M of newly incurred costs to get an unidentified amount of revenue. Revenue for this calculations is difficult to measure, as new backlog is not the right figure, nor increase in realised revenue. This is because the amount is something in the middle. The real revenue increase from those costs would be the revenue acquired (not in this year, but in future years too adjusted by churn) from converting the backlog PLUS the advancement in backlog conversion (which tipically takes 90-180 days. So If the company has advanced in backlog conversion in 2018 say 60 days and there's still 50 days of work left, 2018 costs are financing revenue from 2019 onwards. Again, difficult to measure.
To anyone interested I have this structure in mind:
https://www.slideshare.net/DavidSkok/the...nd-metrics
I've tried to lay out my thoughts, but it might not be clear enough, so I'll add any clarification if needed. These issues are only essential as we eventually expect this story to become an earnings story, however the foundations of that story are being set now.
For great 2019 stock performance we just need impressive revenue growth, I think it can be achieved. I am long.
For FY2018 I'd say almost $10M of newly incurred costs to get an unidentified amount of revenue. Revenue for this calculations is difficult to measure, as new backlog is not the right figure, nor increase in realised revenue. This is because the amount is something in the middle. The real revenue increase from those costs would be the revenue acquired (not in this year, but in future years too adjusted by churn) from converting the backlog PLUS the advancement in backlog conversion (which tipically takes 90-180 days. So If the company has advanced in backlog conversion in 2018 say 60 days and there's still 50 days of work left, 2018 costs are financing revenue from 2019 onwards. Again, difficult to measure.
To anyone interested I have this structure in mind:
https://www.slideshare.net/DavidSkok/the...nd-metrics
I've tried to lay out my thoughts, but it might not be clear enough, so I'll add any clarification if needed. These issues are only essential as we eventually expect this story to become an earnings story, however the foundations of that story are being set now.
For great 2019 stock performance we just need impressive revenue growth, I think it can be achieved. I am long.