I think I'm on record here as estimating revenue of $2.5m-$3m for the quarter with a cash inflow of ~$500k.
It has become more difficult to analyse FRX's numbers as they haven't been providing as much to investors, and when they do release, the data is often inconsistent with previous reporting periods.
I'm always very skeptical of companies that change their reporting style or metrics, but given FRX essentially have a single product and one that can (in a round about way) be scored on daily app downloads, it is less concerning to me.
I'm hopeful that they are simply too busy getting on with business, to placate the investors who aren't insiders.
Previously, I was more discrete about my projections and I was hoping to further build my position, but given the requirements for further funding have been removed, I feel it will be difficult to gain further meaningful exposure at current levels.
CYQ4 last year was one out of the box, with $1.25m in receipts. Of this, I calculated about $1.15m was for X microchip sales the remainder was 'corporate' sales. The preceding quarter had almost double the level of receipts in corporate sales, so it actually masked the real levels of growth in the consumer product.
This trend has continued and two quarters ago was the last time I was able to break out corporate sales. Then they were at about $50k and basically insignificant. I'm not entirely sure whether FRX now class X microchip sales to partners as corporate revenue or not, and to me this really this doesn't matter, as the initial sale would come at low/no margin anyway.
Whether they have discontinued the practice of wholesaling SIMs to partners, I'm not so sure. I certainly know that in the past, they have been able to 'blend' their revenue in their quarter reporting, which painted a rosier picture than was actually the case.
Even if they are continuing to wholesale, it will have far less impact on the numbers now as they have reached reasonable scale. If you see a jump in Advertising & Marketing spend, this to me is a more likely indicator that they are selling wholesale rather than them actually spending significantly more in this area. This is evidenced across the past four 4c's where A&M spend hasn't really changed that much.
The metric to watch is PM & Operating costs. It has been running at ~50% of customer receipts for almost a year now. I would want to see this number grow beyond their projections this quarter ($895k) because virtually all other costs are static.
For cashflow it look like you can halve receipts and subtract $1m (give or take) let's see if this holds this quarter.
AppAnnie rankings are at at all time highs, the rate of subscriber growth is accelerating.
Of particular interest is the rankings in the Middle Eastern countries. They have exploded in recent times. You may have noted from the recent 4C that UAE had entered the top 5 for subscribers (as predicably had Brazil), but now I've seen regular sustained very high rankings in a number of Arab countries. Although individually these nations are quite small, their citizens are relatively affluent and quite mobile. Highly likely to be the influence of the partners brought on in that region.
One disappointing aspect, is that no traction has taken place in Russia or China.
I'd be interested in anyone else's thought/guesses or projections!
FRX Price at posting:
6.7¢ Sentiment: Buy Disclosure: Held
(20min delay)
