Re: New ContractAnd there it is... a $2M engagement that resulted in an at least $40M 5-year contrct (though likely higher given most SaaS deals have annual escalators of 5% to 10% (sometimes higher). That'll be roughly 7.5M ex. working capital in annual gross profit added in 2023 for the SaaS division (assumes 1M in direct costs being incured by the company which is about average for this type of deal, though it could be a bit higher. They'll be compensated for that which is why year one is $8.5M. Therafter it'll be $7.8M of annual high margin business for at least 4 more years.
The other announcment this quarter was the $3.5M extension of an already extended (end of Q3) deal by an additional $2.3M deal (the original deal was $4.1M), which equates to roughly $1.3M of new revenue growth per quarter in 2023 (and as I understand it a high liklihood of further extension); or $5.2M incremental revenue for the year.
So in total for 2023 that's a $2M engagement + $8.5M contract (less about $1M direct costs) + $5.2M additional business from a prior win = net $14.7M SaaS new business this year (or therabouts. If direct costs are much higher perhaps its $12-$13M this year). Regardless that is significant growth (43% to 53% YoY) for not only the SaaS division (which did $27.7M for the past 4 trailing quarters) but its great growth for the business overall (assuming $90M rev for last year it would be 13% to 16% top line growth of the highest margin segment).
Yeah I would expect the stock to pop on this news if it weren't for the fact it hasn't been followed very closely, so it might take a few days or longer. Probably not a bad time for those sitting on the sidelines to consider jumping aboard.