RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Good NumbersYou will start to see the bottom line expanding for 2 reasons:
1) GXI's gross margin will continue to expand as their customer base continues to grow. Their software business (what they are all about) actually has very good margins. The consolidated gross margin (~48%) is brought down from the COGS on the devices they are implementing, which accounts for about HALF of the current COGS! The COGS on Support and Infrasfructure there after is minimal and will provide high cash flow for the comany in the future.
2) Since the company is still small we are just at a point where we are seeing operating leverage from the companies fixed costs (sales, admin, R&D, etc.). As sales pick up the operating margin will naturally improve as sales will outpace the increase in any of these costs.
I love business's like this where they implement long-term contracts that produce high margin revenues there after. Unfortunately I think the market has expected a lot more out of the company and is getting inpatient. I believe this will be a great long term company with the current customer backlog in place.