Spoke with IR todayI spoke IR this morning. O
verall good conversation. Company still appears to be on track, but stock market is giving it no love. They often get compared to TrackX, which isn't very fair IMO when TrackX is burning way more cash and is a 20 year old biz. BeWhere has only been selling commercially it's LTE-M beacon for ~1.5 years. · Still on track to do $6-10M in sales for the year
· Margins on H/W won’t improve from the current ~15-20%. Not sure where investors got the 35% figure. Carriers hardly make margin on H/W anyways. BeWhere wants to focus on building up the recurring rev base to have very high margins eventually.
· Margins will improve A LOT when the rev mix is tipped towards the recurring rev. Recurring rev is 80-90% GM as most of the time they're just piping (sending) data from their server to the reseller or analytic platform owner's server, and not storing the data either. This will of course take time.
· Two big deals should close very soon, it's doubtful they will be able to disclose the names though. And other big ones at various stages in the pipeline.
· Fleet complete has finally started re-ordering and have run through the whole 20,000 units. Sales from them are accelerating (sold the last 4,000 all in 1 month).
· Sales cycle has been 6-9 months historically and will improve as more clients join. Customers won’t want to opt for pilots when they know many other companies in their industries have already adopted the product. Also, part of the reason it's so long is because it's a still new technology.
· Expects no further dilution and is strongly averse to it. They have >$3M sitting in the bank and are mostly leaving the money untouched in case they need to fund very large orders. They also have terms with their manufacturer now.
· The customer is paying the 30% tariff from China exports. Their Canadian manufacturing partner comes in only at 20% more expensive VS. 30% for China, and they’re working on getting better pricing to manufacture all in Canada.
· Has 30 pilots that commenced in the last week alone…
· Orders in the pipeline are growing in size, going from a few 100s of units to 1,000s of units. Very encouraged by this. Orders on average could be of 10,000s of units in size next year.
· Gen 2 units will have better margin than Gen 1 but not my much.