RE:RE:RE:RE:RE:RE:RE:RE:RE:New to Board - Need AdviceThe $14.5M includes costs associated with new connections and engineering servies. You seriously need to go into the MD&A and look at Q4 costs and where they come from:
Cost of sales $ 3.579 Salaries, wages and benefits $ 4.486
Sales and marketing 0.304
Research and development 0.323
General and administration 1.924
Total Ops expenses 7.037 Ignore the non-recurring professional services, depreciation, share based comp.
Finance costs 1.694
Foreign exchange loss (gain) 1.583
Business acquisition costs and other expenses 0.501
Other income (0.971)
Total 2.807 Total is 3.6+7+2.8 = 13.4M
If you add another 13k assets, you probably see cost of sales go up 1M or so. So total steady state costs are around 14.5M. This includes ALL costs for all activities. The engineering servies have lower gross margins, but their labour is fixed costs. So either Russ uses those engineers to do hookups, engineering servies, or R&D. He talked about this. It doesn't matter where they show up in the income statement, the labour's cost is fixed unless you hire more people. They need to generate around 14.5M in top line revenue to offset the total quarlterly costs. Top line revenue includes engineering services, R&D, and hook ups costs.
For some reason you're stuck on the notion that all that other revenue is going to zero and SaaS revenue has to cover everything. McDonalds sells hamburgers every quarter and that's not MRR lol. If Mcloud stopped eng services and hookups, they could lay off those engineers and the 14.5M cost would be much lower.
So again:
70,000 x $50 x 3 = 8.4M
New connect fees say $3M/Quarter
Eng Services @ 2M/Quarter
=13.4M
The question is what's the average MRR. is it 40 at 70,000, 50? If you aren't sure about the math, then you can contact IR.
The more important question is why do we care about 70,000. I care about 500,000. Do the math on 100,000, and 500,000. I'm not investing in Mcloud to get to 70,000, but to get past 70,000.