Cameron - CSI Substack Planet MicroCap Vegas thoughts What they do: Industrials (Electrical Equipment & Parts) a technology company, offers smart grid solutions Canada and the United States. It operates through two segments, Connected Devices and Infrastructure, and Utility Software Applications and Services.
Potential rewards: It’s a company that’s hard not to like. While many companies offer smart-home, or smart-car, or smart-tracking applications - Tantalus is the only company I know of that offers smart-grid solutions. Modernizing an electrical grid that in some cases hasn’t changed in 100 years. I would suggest it’s worth a look at their investor deck showing you the long-term opportunity of their products/ services because they make “common sense”. One of the challenges however, is like many things that haven’t changed in a long time, change is hard - and slow! Tantalus clients are usually large utilities companies with CEO’s still driving a Corvette with the stereo tuned to AM talk radio. Tantalus reported full year 2024 earnings in late-March, with $44.3M revenue (up 5.1%), $12.7M of ARR (annual recurring revenue) up 10%, and a diluted loss per share of $0.05 (compared to $0.04 last year) - not great! The highlight of the year might be generating positive Cash Flow from Operating Activities of $2.6M compared to negative $0.8M in the prior year. So hopefully financings (share dilution) like the $7.3M they raised in May 2024 are not longer needed moving forward (hopefully). Good company, reaching some inflection points to be more profitable, and unfortunately more of a tortoise than a hare.
Potential risks: There’s very little I dislike more in companies than expenses growing faster than revenue, and this is especially true when a company isn’t even profitable yet. Underneath the lackluster 5.1% revenue growth lies operating losses of $1.2M in 2024 - mostly due to general and administrative expenses going up nearly 20% (or 4x quicker than sales). That gives me significant concerns that the Tantalus business model is struggling to scale, a real concern for any microcap stock investor.