04-18-2019, 01:44 AM
A good restatement of the long case, which we are not blind to, but it doesn't address some main concerns:
["At the midpoint of 2019 revenue guidance of $110M, this implies $35M revenue from iPass, $30M Artilium and $45M from legacy Pareteum, which implies 40% organic growth from the legacy business."]
So organic growth is slowing down from 100%+ to 40% whilst backlog is exploding and the writer of the report doesn't even recognize that this is odd.
There is not really anything new in that report, despite arguing that it addresses concerns raised on SA (which is curious in itself) it doesn't address the two key concerns we have:
That indicates a conversion rate well below 50%. That's not a given, it could be better if they exceed guidance, which we expect them to do anyway, but they need to exceed by a lot to come anywhere close to their guided 75%-80% conversion rate.
["At the midpoint of 2019 revenue guidance of $110M, this implies $35M revenue from iPass, $30M Artilium and $45M from legacy Pareteum, which implies 40% organic growth from the legacy business."]
So organic growth is slowing down from 100%+ to 40% whilst backlog is exploding and the writer of the report doesn't even recognize that this is odd.
There is not really anything new in that report, despite arguing that it addresses concerns raised on SA (which is curious in itself) it doesn't address the two key concerns we have:
- Evidence of dodgy customers. We have no idea how big a problem this is but it should be a concern. So maybe they are not dodgy but just start-ups, but they are penciled in for multi-million dollar backlog.
- Exploding backlog in combination with materially decreasing revenue guidance.
That indicates a conversion rate well below 50%. That's not a given, it could be better if they exceed guidance, which we expect them to do anyway, but they need to exceed by a lot to come anywhere close to their guided 75%-80% conversion rate.