RE:RE:RE:RE:RE:Questions About QTRHI think we are sasying the same thing in a way!
Most QTRH tolling contracts are made up of two parts. First there is the implementation period which includes hardware and customized software, among other things. Typically this phase is 12 to 36 months, depending on the size and complexity of the project. Properly bid and executed, this phase carries lower margins in the 10%0- 12% range. The second phase in operations which includes maintenance of both hardware and software. This stage could last 5 to 10 years and carries margins in the mid 20s. I would call this stage recurring revenue, although the flow will differ from project to project. I believe that on previous calls management indicted that the implementation period typically represented 35% to 40% of the total contract value when initally awarded and operations represents 60% to 65%.
Additionally, during the operational phase (although not exclusively) there are change orders. ETC's experience prior to acquisition was that change orders play an important part in overall revenue generation. Competitor ITS tolling companies have made similar statements on the importance of change orders to overall revenue. The average length of an ETC contract at the time was 12 years and revenue was 8.8x the original contract value during the contract's lifetime (QTRH investor presentation August 2021). At the time of the ETC acquisition, margins on change orders were indicated to be in the 35% to 45% range.
Of course increasing recurring SaaS revenue of the type you describe with the telcos or Office 365, for example, is on the to do list but not immediate. In the meantime, you might find it helpful to understand the current business as it will be the base for several years to come.
This is my perspective - take in or leave it; as a new QTRH investor you might want to ask Dave Mason, QTRH's investor relations person, to spend a bit of time with you to answer some of your questions. I've found through the years that he is very accessible.