RE:RE:RE:RE:Keep watching Joseph_K -
Please educate me about this 'recurring revenue' model. As I see it, we are currently primarily a services company. We do a bunch of 'one off' jobs for various companies right? Sure, some of them might really like how we went about our business, our prices, how much we were able to save them, etc, and so they bring us back to do other 'one off' jobs, but this isn't really a recurring revenue model.
Where are we supposed to be finding recurring revenue contracts? I believe that is the point Burns was trying to get across. Am I wrong?
Or are you looking to the future to some other aspect of the business that will actually generate recurring revenue? If so, please enlighten me as to what that might be?
Here are a few examples of recurring revenue:
- Telecom - Rogers/Bell - They have thousands of cell towers scattered across Canada that need to be inspected continually. This is usually done by foremen or helicopters. They might have drones that do this, but I have seen no indication of that being the case. UAV would be able to supply them with their surveying needs and a regular basis. The details of this kind of contract would be very lengthy, but UAV could do it assuming they have enough drones to do it.
- Infrastructure - Pipelines/Highways - Once again, surveying on a continual basis. Use of LiDar would be an advantage in this scenario.
- Military/Defence - Not just the obvious of providing survelence to borders or military facilities, but to provide movement of goods in difficult terrain or urban areas. THis is one that they are trying to get in to for sure (as you can see with their posts about all the military stuff). Some examples: Transporting blood to medics in urban war zones. Same with ammunition to special forces. Lidar is great for detecting mines or IED's... The militatary options are endless.
- Mining - This would most likely be an "on retainer" as needed contract. UAV already works for some of the biggest mining and exploration companies in the world (De Beers is one of them). SO I wouldn't be surprised if they get one of these soon as they are used frequently enough.
Allot of the recurring contract reveune would come from general surveying needs, however UAV is positioning themselves to become a niche provider of drone solutions.
Also, yeah, I'll admit it. I'm a 'meat head' that doesn't do nearly enough DD on any of the stocks I get involved with. I also only ever post about the ones that are underperforming, as UAV clearly is right now.
I caution you to change this behaviour. I used to be this way and I found myself without a strategy when the markets got wavey. When I invest in a company, regardless of my long or short term strategy, I always do my own DD. That usually involves calling management (IR or whoever picks up the phone). When I call them I grill them about their financials. There is no airy-fairy fluff-n-puff when it comes to numbers (Im an accountant by profession, so I dig in a little).
Also, I read ALLOT about the company and the industry and try to get an understanding of what is "normal" in the industry. Currently UAV is not "normal" in the sense that they are outperforming their competitors when it comes to revenues and asset growth. That is why Im so optomistic about UAV. I believe there is significant upside to the share price and i'm confident that management will be able to add value to the company in order to achieve this.
As for the revenue, we were around $350,000 in Q1, $540,000 in Q2, and everyone is expecting even more from Q3 in a few weeks, for our roughly $8.5M market cap company.
Contrast that with the $127k or so that DVR did last quarter, and their roughly $4.5M market cap.
Things that make you go hmmm.
Exactly! Currently UAV has made around 86% of last years revenue just in the first two quarters. May I remind you that those are the slow quarters, and that was acheived with only one of their subsidiaries (Higheye) with out the help of AIR. So imagine whats going to happen when all 5 companies are rolling full steam ahead!