ShareholdersUnite Forums - Pareteum (TEUM)

Q1CC

Wed, 08 May 2019 04:10:35 +0000

Some notable points, we'll keep adding:

Revenues $23M, that is $5M from iPass (half a quarter) and under $3.5M for Artilium, so that's a pretty hefty growth for core Pareteum which did less than $10M in the last quarter and now more than $14M.
Somewhat curious though, they also argue sequential organic growth was 33%, it seems to be 40%+
Backlog conversion was 101% but that's a 27 month average, implying a small decline but still well above the guided 75%-80%.
This might have something to do with Turner's overall lesson "sell what can be deployed immediately and stop selling tailored or custom contracts." Or "configuration versus customization."
They hope to profit from the latter later on by being able to charge for customization and speed it up.
There is also a learning effect in geographical expansion.
Conversion doesn't seem to hold them back and they've got the people they need, grosso modo. If true we will see operational margins and EBITDA margin expansion.
Indeed, G&A is growing considerably slower than revenue, declining to 33% of revenues (from 56% last year), they expect this to continue.
What is a barrier is market coverage, but rather than hiring more sales people, they're working on some channel strategies (no specifics provided).
The end of Q1 cash balance was $10.7M, they paid $2M for Devicescape drew $25 from the Post Road loan and paid off the iPass loan ($13M or so, if I remember correctly).
They acquired Devicescape, a strategic partner for iPass for $2M in cash and another $2M in shares. It's a leader in 'virtual WiFi networking,' opening up all sorts of location based advertising for customers.
Given the backlog controversy, they stressed that others had done DD, like the acquired companies (as they were largely paid in shares) and the Post Road Group (which provided them with a $50M credit line).
They now have 12M connections (subscribers, devices and their network usage).
Of the identified $19M in cost synergies from the iPass acquisition, $14.5M have been achieved which made the acquisition accretive (just), net of transaction fees and restructuring charges.
They listened to us (sort off)! Backlog is going to be announced only quarterly.
The company converted way better than the 15%/30%/55% scheme as they converted and billed year one at 20%; we expected year two at 30%, we actually billed at 43%; we expected year three at 55%, we actually billed at 89%.
They have over 1000 active customers (most of which come from the acquisitions).

We'll keep adding factoids and observations, feel free to add..

Revenue growth actually slowed in Q4

Sat, 13 Apr 2019 19:06:56 +0000

Well, we thought the problem was just in the backlog numbers and we didn't think there was any evidence suggesting that revenues were affected. Perhaps that's too optimistic. Here are the quarterly revenue numbers:

Q1: $4M
Q2: $6M
Q3: $8M
Q4: $14.3M

But here is the thing, Q4 revenue contains $5M revenue from Artilium, per the Q4CC. That is, legacy Pareteum revenue in Q4 was $9.3M with sequential growth halving from 33.3% in Q3 to 16.25% in Q4. Even in dollar terms growth was less in Q4 ($1.3M) compared to Q3 ($2M).

Not necessarily conclusive, but in the light of exploding backlog is curious that revenue growth (and revenue guidance) are moving the other way and yet another sign that investors should keep a wary eye on this one.

Stylized facts

Thu, 11 Apr 2019 16:14:00 +0000

Stylized facts are facts which are supported by the weight of existing evidence. These are subject to change when new evidence appears (or when one becomes aware of its existence). In case of Pareteum:

Evidence pertaining revenues:

Grew 101% organically last year, audited
Guided only at 50%+, turned out to be very conservative guidance
Hoving Partners with 12M shares run by ex-insider
Whole sector is growing fast, 100% growth isn't all that strange

Evidence pertaining backlog

Considerable inconsistencies in their own reporting
AVG presentation, guided $84M backlog for 2019, should be considerably more now as backlog has more than doubled since than. This seems inconsistent with their last revenue guidance ($105M-$115M) as much of that ($89.7M per the acquisition filings) is from Artilium and iPass, leaving only $15M-$25M for legacy Pareteum, which sits odd with the $84M backlog.
Management guided $144M in revenues in the iPass acquisition presentation but this was lowered to $105M-$115M in their Q4CC, basically as they moved from 100% conversion to 75%-80% conversion.
The examples of some of the companies that signed contract and are responsible for the backlog as reported by the article from the Oil & Gas Investor Bulletin.
The company raking in $938M in backlog with a tiny sales force.

That is, we think the revenue numbers are real but the backlog numbers are inflated. Whether you agree with the latter is up to you, as is how serious an issue it is.

SHU what’s the deal?

Thu, 11 Apr 2019 12:53:46 +0000

SHU,
I do find it a little sketchy that you told us here yesterday that you just reduced your position and the very next day get a bearish article published by SA. That article would have taken approximately a week to write and get approved by them for release.

Decreased comfort level

Tue, 09 Apr 2019 16:05:51 +0000

I have to admit that my comfort level with Pareteum is decreasing a bit due to a couple of critical articles and comments. I feel that I can't entirely ignore these criticisms and we think investors in general should not ignore other opinions of their stock, even if they're completely the opposite of one's own opinion.

Here is some of the stuff I'm uncomfortable with as I don't have ready answers and can't argue these away:

While most of the customers who signed up are not known by name, there seem to be some questionable companies in those that are known. As a result, we can't exclude the possibility that the backlog number ($933M per this morning) could be overly aggressive and there seems to be at least some recognition from management as they guide 2019 at 75%-80% conversion, not their historic 100%.
The previous history of their CFO appears to have some problems.
The fact that competitor Twilio needs a much higher level of OpEx, providing the CPaaS services seems to require more manpower at Twilio than at Pareteum. Despite doubling revenue, operating cost haven't increased all that much at Pareteum last year. While I previously considered that a sign of potential great operating leverage, it's odd that this isn't visible in a much larger competitor.

Keep in mind that the fact that we can't answer these doesn't necessarily mean that they don't have satisfying answers.

In case you think I'm changing my mind 180 degrees and turned into a short, no. There are a number of positives that stand quite solidly and are difficult to deny, like:

The whole CPaaS sector is growing fast.
Organic revenue growth of 101% in 2018.
Management guided 2018 revenue very conservatively (50%+ growth), curious for a management that is accused of being very aggressive.
Having Vodafone as its biggest customer, good for 40% of revenue.
The recent deal with Citrix, indicating iPass (which was ailing prior to the acquisition) business can be revived.
The 12M shares in bought by Hoving Partners, Swiss wealth management managed by a former non executive Artilium director.

Longs can take comfort in these six facts.
Whatever exactly the reality is, sentiment seems to have turned as the stock seems to be unable to rally further on good news. I realize people might even get angry at me for writing this, but I feel one should be as open as possible to conflicting information and alternative readings of the facts and I feel I have a duty my followers to also point out potential pitfalls. We should at least discuss these things open, here.

The CPaaS market

Thu, 28 Mar 2019 23:08:28 +0000

For market conditions and evolution, CPaaS stands for communication platform as a service, it's what Pareteum does.

Summary of a report from IDC:

Quote:This IDC Market Analysis Perspective presents the worldwide voice and text messaging communications platform-as-a-service (CPaaS) market. This market is forecast to grow from $2 billion in 2017 to $10.9 billion in 2022. The voice and text messaging CPaaS market has rapidly evolved into a mainstream segment with many companies entering the segment and adding APIs to their portfolio to leverage the tremendous interest and demand for APIs. IDC is predicting that CPaaS will continue to grow at strong CAGR of 39.2% from 2017 to 2022.

The CPaaS market has moved beyond the hype cycle and has become established a tangible force in the communications industry. The 2016–2017 IPOs and mergers involving Twilio, Nexmo, and Bandwidth provided tremendous momentum as well as new pressures on the industry. Over the next few years, the developer ranks will continue to swell, use cases will proliferate, and a new wave of enterprise beyond cloud-native companies will join the ranks of the initiated. The demand is driven by enterprise digital transformation requirements. Enterprises are engaging customers via mobile applications, providing customer support and commerce on the web, migrating internal applications, and enhancing notification applications with APIs.

The next stage of CPaaS, which can be labeled CPaaS 3.0, is already taking shape. The leaders of the core CPaaS segment such as Twilio and Nexmo have already moved beyond the basic API — functions to encompass integrated platforms that offer a suite of services that will further deconstruct the toolset. This will bring APIs to a new layer of knowledge workers beyond developers and into the C-suite and into new segments such as contact center and IoT.

Market Analysis Perspective: Worldwide Real-Time Communications (CPaaS), 2018

With thanks to WallstPirate!

Valuation

Tue, 26 Mar 2019 22:06:35 +0000

We've submitted another Seeking Alpha article where we argue that Pareteum shares have significant room for valuation multiple expansion, trading at 4x sales whilst organic growth (ex acquisitions) is 100% (although that could very well come down a bit as a result of the acquisitions).

Now, look at this chart with SaaS companies which sets out their growth rates against their sales multiple and you get an understanding for what an outlier in terms of valuation Pareteum still is..

Business model

Sun, 24 Mar 2019 00:00:55 +0000

Here a thread to discuss Pareteum's business model. We'll start off with an introduction from Chairman Hal Turner from the June 2017 Letter to Shareholders:

In our business, we have three subscription-based offerings:

(1) the Managed Services Platform (i.e., serving customers such as Vodafone, Zain and the new customer in Brazil);
(2) the Global Mobility Cloud Services Platform (i.e., serving customers such as THYNGS); and,
(3) the App Exchange and Development Platform (i.e., serving customers such as Pronto Telecom)

For GAAP accounting purposes, revenue is earned when services are delivered, regardless of when cash is received. Therefore, it’s critical to understand the timing involved in the various steps of our business – the signing of an agreement; the implementation and delivery when service is established, and finally, billing which generates revenue. This is a multi-stage process that typically takes 90 days to complete and up to six months or more for very large Managed Services implementations as illustrated below:

Furthermore, in terms of inherent value and market multiples, these contracts also include a variety of customer commitments which generate a backlog of stable, predictable and guaranteed revenue for the Company. As of today, our contracted backlog currently stands at approximately $60 million, however, with a capitalization that is just 1/10th of our contracted backlog, it’s clear that our Company is not being fully valued by the market. This a disconnect that must and will change, as we begin to deliver the sequential revenue growth we expect to report over the remainder of 2017 and throughout 2018.

Total Contract Value is Only Part of the Story

In our MVNE model, the total contract value (TCV) is one way to measure a SaaS contract under GAAP. TCV is simply the sum of two elements – the upfront service implementation fee and the guaranteed minimum monthly recurring fees from managing individual devices. This, however, is only part of the story as our contracts contain additional important structures which can and do create significant “layers” of revenue for the Company.

Utilizing our Brazilian contract as an example, let me now answer some of the questions on our process from contract award to billing:

Our Company has been contracted for a seven-year MVNE services agreement. This agreement includes a service establishment fee valued at approximately $300,000 which is used to offset upfront costs including any hardware, software or service provisioning that may be required. This fee is recognized over the course of the implementation period which can take between three and six months based on the customer.
The terms of this agreement also include a guaranteed “monthly minimum” flat rate fee which is recorded as MRR until the agreed per subscriber/device monthly support charges exceed specified levels. This layer of revenue is called the “ramping period” of the contract and begins immediately upon the onboarding of the first subscriber or device.
Beyond the calculated TCV, the revenue potential of the Brazilian deal is also impacted by a “protective” scaled per subscriber/device fee schedule. This schedule includes pre-defined fee increases should the customer not reach their own projections. This is one of the contractual elements present in each of our MVNE services contracts that generates the sizable backlog I referenced earlier.

For reporting purposes, the combination of paid-in-advance fees and guaranteed minimum MRR delivers a minimum total contract value of approximately $2 million over the term of the contract. In this case, our customer-supplied business forecast projects a minimum of 3 million subscribers and supported connected devices within a three-year period. We closely monitor and will report on this “rolling 36-month view” of revenue since in our opinion, this timeframe best captures the essence of our SaaS business model. Based upon the terms of our per subscriber/device fee schedule, this would generate annual run-rate revenue in the 8-figures range (i.e., > $10,000,000) by the end of the third year of service. As you can see, the impact of this additional revenue layered onto our current revenue base is significant, and given expectations that our margin structure will increase from its current 70% level, this contract will drive meaningful bottom-line growth as well.

While newer contracts like Brazil reflects the general base structure of our MVNE SaaS contracts, it is important to note that established customers such as Vodafone have already surpassed their contract minimums, meaning they are generating MRR which we call “run rate revenue” and are contributing to our backlog. This contracted backlog has value not only because of its present value, but because of its stability and predictably as defined by a tiered per subscriber/device fee schedule.

To recap, there are four key drivers of revenue:
1) Upfront service establishment fees,
2) guaranteed minimum monthly recurring revenue (recorded as MRR),
3) an estimated scaled subscriber/device fee schedule based upon customer-provided estimates, and,
4) current MRR/run rate revenue generated from existing customers which today is our primary base of revenue. Each of these key revenue drivers has its own time frame for revenue recognition.

Vodafone

Sat, 23 Mar 2019 23:22:50 +0000

Not many people realize that Vodafone is Pareteum's biggest customer, responsible for 40% of its revenue in 2018. Fewer still might realize that a daughter company of Vodafone helped developing Pareteum's CPaaS platform, it's Global Mobility Cloud Platform. From a Jan 2017 company PR:

Quote:NEW YORK, Jan. 24, 2017 /PRNewswire/ -- Pareteum Corporation (NYSE MKT: TEUM) ("Pareteum" or the "Company"), a leading international provider of mobile networking software and services, today announced that it has been awarded a new technology development contract from Vodafone Enabler S.L.(VEE). Pareteum has received an additional engagement from Vodafone for the deployment of technology that enables the delivery of advanced service capabilities for customers hosted on its cloud platform and includes material upfront payments and additional ongoing fees.

The newest Vodafone Enabler engagement, a significant addition to its existing agreement, expands the capabilities of Pareteum's customers including Mobile Virtual Network Operators (MVNOs), enterprises and communications service providers to deliver full-feature, advanced mobile services typically available to subscribers on Tier-1 4G networks. Once completed, the platform enhancement will allow Global Mobility Cloud customers to cost effectively offer mobile subscribers a full array of data-rich capabilities including mobile web access, IP telephony, gaming services, high-definition mobile TV, video conferencing, and VR applications. The Company is finalizing development and implementation of the new services for customers by the end of the first quarter of 2017. As clients are added to the broadband-enabled platform, Pareteum will receive additional monthly recurring subscriber revenue.

"Pareteum's Global Mobility Cloud Platform has already begun to demonstrate its power to disrupt the mobile communications market by eliminating the costly barriers created by legacy networks and geographic location. Together with Vodafone Enabler, we are ready to accelerate that disruption," said Hal Turner, Executive Chairman of Pareteum. "Broadband service delivery greatly enhances our cloud-based services capabilities by enabling any provider or any brand to offer the full range of advanced mobile services previously reserved for customers on the biggest, most advanced networks," Mr. Turner added.

"Technology is having a significant impact on the mobile communications industry by enabling enterprises and consumer brands across every industry to provide new connectivity solutions to their employees and customers. Providing support for full-featured, advanced mobile services empowers those organizations to innovate and differentiate themselves; in turn creating tremendous value for their businesses and their stakeholders," stated Vic Bozzo, Chief Executive Officer of Pareteum.

The short arguments exposed

Tue, 19 Mar 2019 16:20:27 +0000

You will see people posting stuff on message boards or even the comment section of our Seeking Alpha articles, trying to scare you out of your shares. So far, we haven't seen much that should give investors things to worry about.

For instance, they have argued that the auditor has, in the latest 10-K (the 2018 year-end report), expressed that the company has shortcomings in its control systems. Here is why that is less worrying than might seem at first sight:

This is a small, fast-growing company absorbing two acquisitions, some organizational shortcomings for such companies are not all that uncommon.
What the critics/(shorters?) conveniently left out was that the audit did specifically stated that these shortcomings haven't affected the financial figures. That is, the auditors are vouching for these, including those backlog figures..
What the critics conveniently left out is that the company reported extensive measures to shore up their control systems in the same 10-K.

Here is what the auditors said about the finances:

Quote:In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America

And here is what management said about improving the control systems

Quote:Remediation
Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented and operating effectively. The remediation actions to the Company’s internal controls over financial reporting include a thorough review and documentation of all processes involved in our financial reporting to ensure that there is segregation of duties, access security and documented review processes in place that happen at appropriate intervals throughout the year that covers all elements of the Company’s financial reporting. This includes, but is not limited to, testing samples and documenting that testing has occurred with the results of the findings being reported to senior management and that they occur at appropriate intervals and continuously making improvements to our processes as necessary.

To addres ineffective design, implementation and monitoring of information technology general controls pertaining to the Company’s change management process, the Company has
(i) removed all live access to all developers, internal and external, from being able to make coding changes directly in our reporting system;
(ii) will continue to monitor and document all changes made in our reporting system and add additional layers of documented review of these changes;
(iii) will institute sample testing of changes made in our reporting system to ensure the documented policies are being followed and report the results of these tests to senior management in regular appropriate intervals; and
(iv) enhance our quarterly reporting on the remediation measures to the Audit Committee of the Board of Directors. We believe that these actions will remediate the material weakness.

The weakness will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We expect that the remediation of this material weakness will be completed prior to the end of fiscal 2019.

From the 2018 10-K

Tue, 19 Mar 2019 00:52:00 +0000

Pareteum is in fast- growth mode, which will be achieved through a combination of organic growth as well as targeted and accretive mergers & acquisitions, such as the recent acquisitions of Artilium and iPass, as well as others that will be identified from time to time.

Pareteum continues to win new long-term contractual business. We expect this pace to increase throughout 2019 and beyond. We see many new opportunities, including those that leverage our support of emerging technologies, which is at the heart of our identity management and payment systems integration plans.

Our focus is on selling and implementing new communications services and IoT opportunities as fast as possible, as the world of connected devices and people continues to rise on a daily basis. We will measure our growth in the numbers of ‘Connections’ that we on-board to our platforms, be they SIM cards, handsets, devices, vehicles etc. As at December 31, 2018, we had approximately 4,609,000 connections, an increase of 252% over the end of the prior year.

Our go-to-market strategy uses a four-phase approach:

Phase 1: We continue to attract new subscribers across all verticals to all our platforms through direct sales, existing channel partnerships and new initiatives such as referral programs.
Phase 2: We will continue to on-board new communication services providers, multiplying our own growth, largely through business development and direct sales in each of our six defined sales regions (North America, Latin America, Europe, Middle East, Africa, and Asia-Pac).
Phase 3: We will drive adoption through a twin approach. First, we will be on-boarding more Connections which are already active on our Managed Services and Global Cloud Platforms, as our initial user base. Second, we will be drawing in new customers and end-users to the Application Exchange & Developer Platform. These will be people with the greatest pain point, who are underserved by the current mobility networks and applications (including in developing markets).
Phase 4: At this stage, our strategic Application Exchange & Developer Platform customers will have their own go-to-market strategy, creating shared value, ranging from traditional consumer strategies to sophisticated B2B and B2B2C strategies, driving and expanding our ecosystem to new heights.

The phases described above are already being implemented, in parallel as far as possible, for the fastest most sustainable growth and this highlights our strategy for accelerating the world’s shift to an open mobility and application network. When we’re successful, it will accelerate the pace of innovation in the world, create more economic freedom, and provide better mobility services to billions of underserved people..

Issues resolved. Greatly increased mobile access speed!

Mon, 18 Mar 2019 00:33:20 +0000

We might close for a little while, we're performing maintenance in order to speed up the forum for users from mobile.

Thanks for your patience..

Pareteum Twitter feed

Thu, 14 Mar 2019 17:21:36 +0000

Pareteum Twitter Feed

Starting to get a wider audience..

Thu, 14 Mar 2019 15:56:15 +0000

From Benzinga:

Benzinga Pro's Top 10 Most-Searched Tickers For Morning Of Thurs., Mar. 14, 2019

Akari Therapeutics (AKTX)
Aurora Cannabis (ACB)
Boeing (BA)
Roku (ROKU)
Atossa Genetics (ATOS)
Pareteum (TEUM)
Pinduoduo (PDD)
MongoDB (MDB)
Cloudera (CLDR)
Safe-T Group (SFET)

Notes from the Q4 2018 CC

Wed, 13 Mar 2019 12:19:08 +0000

The software platform shifts control as it removes the constraints of proprietary technology and policies from a single operator, and gives it a global reach.
Customers can (and do) demand custom solutions, easy in software (even if it holds up backlog conversion a bit).
Customers (like MVNO) their own master of their own subscribers and branding, not that of the underlying service provider (the actual mobile (or fixed) network operator).
Super API: enable ecosystem of solution providers, increasing platform stickiness.
Selling to a very large and growing market, powerful scaling mechanism for their business.
MWC in Barcelona was a success, over 100 meetings, lots of opportunities
Artilium was accretive to earnings
iPass supplies 75 new developers, helping converting backlog, need no training, it would have been much more expensive and slower hiring and training these people, and the level is now sufficient.
iPass SmartConnect is a powerful up-sell for their existing service provider customers for WiFi offload, and Pareteum's additional MVNO enablement and messaging capabilities selling to iPass enterprise customers.

This isn't all, we'll keep adding..

Q4 2018 Results

Tue, 12 Mar 2019 20:14:06 +0000

Pareteum Announces Fourth Quarter and Full Year 2018 Financial Results

Q4 Revenue Growth of 256% and FY 139%

Q4 Adjusted EBITDA of $2.34M and FY $6.4M

Q4 Non-GAAP EPS of $0.02 cents and FY $0.09 cents

Net Dollar-Based Expansion Rate of 214% Year-Over-Year

Announces 2019 Guidance - Projecting 225-260% Year-Over-Year Revenue Growth

NEWS PROVIDED BY

Pareteum Corporation

Mar 12, 2019, 16:01 ET

NEW YORK, March 12, 2019 /PRNewswire/ -- Pareteum Corporation (Nasdaq: TEUM), a rapidly growing global cloud software communications platform company with a mission to connect every person and every(thing)™, today announced operating and financial results for the fourth quarter and full year ended December 31, 2018.

"2018 was a record year for Pareteum, achieving over 139% year-over-year revenue growth driven by the effectiveness of our cloud-based platform, innovative product solutions, employee talent and leading customers. In fourth quarter of 2018, we reported 256% year-over-year revenue growth, which included the first full quarter of our accretive Artilium acquisition," commented Hal Turner, Pareteum's Founder, Executive Chairman and Principal Executive Officer. "We are extremely pleased with Pareteum's significant results in 2018 which are attributed to our TEUM's laser focus on sales expansion and operational improvements. Looking ahead to 2019, we are very excited about the tremendous opportunities for Pareteum given the strong industry dynamics; our visibility into future revenue from our 36 Month Contractual Revenue Backlog; and, the augmented talent, product, services, network expansion and productivity improvements implicit from our strategic acquisitions."

FOURTH QUARTER 2018 FINANCIAL RESULTS:

(Unless otherwise noted, all comparisons are made to the fourth quarter of 2017)

Total revenues increased 256% to $14.3 million
In December of 2018 our Global Software Defined Cloud (GSDC) revenue was 51% of our total revenue, with 35% in Managed Services (MSP) revenues, and Super API of 14%
Adjusted EBITDA increased 82% to $2.34 million
Non-GAAP EPS of $0.02 cents
Artilium financials are fully consolidated and accretive in Pareteum's fourth quarter results
Net Dollar-based expansion rate represented 214% growth

FULL YEAR 2018 FINANCIAL RESULTS:

(Unless otherwise noted, all comparisons are made to full year of 2017)

Revenues increased 139% to $32.4 million
Adjusted EBITDA improved 199% year-over-year to $6.4 million
Non-GAAP EPS of $0.09 cents compared to $0.05 cents for year ending 2017
We ended the year with a $6.1 million cash balance and no secured debt

KEY 2018 OPERATIONAL METRICS:

36-month Contractual Revenue Backlog quadrupled to $615 millionfor the full year 2018, up from $147 million in 2017 with a conversion rate to revenue of 100%
Connections increased 252% to 4,609,000 for the full year 2018, and grew 59% sequentially in the fourth quarter of 2018
Fourth quarter average annualized revenue per employee of $415,000, an improvement of 78% year-over-year

We expect revenue to be between $105 million and $115 million for the full year of 2019. Adjusted EBITDA and Cash Flow, net of restructuring and acquisition costs will be positive for the year.

We are expecting 2019 revenue growth in the range of 225% to 260% year-over-year, outpacing the market growth rate fivefold to be updated quarterly

Shorts see the light

Mon, 11 Mar 2019 23:13:48 +0000

They've started to cover in the last two weeks of February (the latest available data).

TEUM short.jpg (Size: 48.25 KB / Downloads: 11)

Edit by the idiot here: I mean validity of TWILO comparison?

Sun, 10 Mar 2019 18:43:25 +0000

Hello all! New here and not yet a $TEUM long but heavily considering a position right before - or after - 12th. On these boards and elsewhere Twilo is used as the competitor company. However, as part of my due diligence on a company, one of the places I like to look is https://www.owler.com/company/pareteum. While Pareteum is the heavy hitter there, note that Twiloix is nowhere in sight. Anyone have a thought on this?

Sorry I said Citrix - blurry head not yet coffee!!! APOLOGIES!!!!!

And no: before anyone starts asking I am NOT a shorter or a shill or a ... I'm just an investor interested in taking a position in $TEUM and very much NOT interested in all sorts of "yeah, taking off" "Rocket from here" etc. BS pumper stuff, but in only taking positions based on the REAL underlying company data and possibilities.

Thanks to all on this fantastic forum!

What to expect on 2019 guidance?

Sat, 09 Mar 2019 14:17:37 +0000

This isn't (yet) an earnings story but a revenue growth story, so the 2019 revenue guidance is the most important thing we will be looking for, as it will give an indication which scenario is the most realistic:

The moderate scenario ($100M-$110M) by analysts.
The company's scenario ($144M) from the iPass acquisition presentation.
The bull case ($150+) from backlog conversion calculations.

You can see some details about the first two of these scenarios here and on the bull case here.

And above, you can vote in our little poll!

Join our forum here.

Ten reasons why this is a great buy

Fri, 08 Mar 2019 00:10:05 +0000

The market for software defined communication cloud platforms is growing fast. Much bigger Twilio is growing at 77%, Pareteum grew at 129% in Q3.
IoT will give another fillip to revenue growth.
The shift to the cloud is in the very early innings, with most of the market served by legacy company solutions on premise. Northland analyst Michael Latimore believes 90% of the addressable market is still served by legacy on-premises software today
Pareteum has a SaaS platform business model that almost invariably commands very high valuations on Wall Street, anyware from 5x to 20x sales.
Pareteum seems particularly well placed, given the rapid progress the company has made on basically any metric. Revenue doubled from Q1 to Q3, 18 months ago it had 4 customers, now it has more than 100, Three-year backlog exploded from $147M at the end of 2017 to nearly $700M at the end of February 2019, etc.
The explosion in 3-year backlog gives great revenue visibility, Wall Street usually likes that.
The business model contains strong inherent operational leverage. Revenue per employee went from $277K in Q3 2017 to $492K per employee in Q3 2018. It's almost like hooking customers up and collecting the rent. The acquisitions will bring this figure down again, but that's temporary.
Customers are happy, the dollar net retention rate is 147%, for every dollar in contract they buy 47 cent more.
The acquisitions of Artilium and iPass offer significant revenue and cost synergies.
The company's shares are mis-priced due to unfamiliarity with the investing public. Selling at just 3x 2019 revenues, and with some assumptions (see here for a very detailed approach) about backlog conversion, it could very well be selling at just over 1x 2021 sales. We think 5x-10x sales would be more normal at the minimum, and believe we will get there when this name becomes more familiar with investors.