Pci-pal Share Discussion Threads

[simon gordon] 16/6/2024 10:03

Steve Kiernan - 15/6/24:

Top SaaS companies are announcing partner-led growth strategies.

Here are just some of the trends and industry examples covered in major Canalys, “SaaS businesses are unlocking growth through diversified partner ecosystems”. The full report is available for download:



•Salesforce announced a focus on “partner-led sales” to drive margin expansion.

•Cisco unveiled the “Age of the Partner”.

•ServiceNow announced plans to add 250,000 new partners and significantly increase partner revenue in just one year (2024).

•Workday plans to double partner capacity by fiscal 2026.

One of the most significant trends in technology partnerships is growth in cloud marketplaces, with Canalys forecasting cloud marketplaces to exceed US$45 billion by 2025. SaaS companies have had significant business growth in marketplace sales.

•CrowdStrike exceeded US$1billion of software sales through AWS Marketplace in 2023.

•Nerdio boosted leads by more than 100% in Azure Marketplace.

•HubSpot App Marketplace has expanded quickly, now hosting over 1,000 apps.

•Workday announced a new AI Marketplace aimed at facilitating the adoption of AI and ML solutions by its customers.

SaaS vendors are also embracing reseller and distribution partners for their extended reach.

•Atlassian derived over 40% of revenue from channel partners’ sales efforts in 2023 and plans to put more investment in international resellers in regions that require local language support.

•Sprinklr doubled the number of reseller partners over the previous fiscal.

•Autodesk drove approximately 65% of indirect channel sales through its 1,500 distributors and resellers in fiscal 2023.

[simon gordon] 15/6/2024 19:49

Eckoh - 10/6/24:

Will AI replace contact centers? It’s a firm No – and here’s why

[simon gordon] 15/6/2024 10:09

This is part of the transcript from the Investor Meet Call from Feb' 24, it discusses operational gearing and the TAM and growth prospects:

CEO
William from Tim K there's a question there about which is really about operational gearing of the business and the costs to date tracking you know increasing in line with with revenues and asking about you know when's the timing of that going to change and you're going to move into more sort of profitability um I thought you might like to talk about the ratios we've been looking at William from a you know GNA perspective to revenue um yes so um

CFO
James and I have kind of an Unwritten rule um we've always said from the from day one that uh you know however fast the revenue is growing and the amount of Revenue we getting in we always want something to drop through to the bottom line to make sure that our shareholders reward and can see us heading back towards profitability cash generation uh and that's been shown in that eidr graph I showed earlier um moving on to these current times

So currently we're looking at uh we're trying to keep a ratio of around 2 to one um um it's quite hard to keep to that but you know so if revenue is growing at let's say 20% um James and I plan around keeping our cost base growing at 10% so 10 you know effectively 10% of the revenue will drop through to the bottom line and I think that's a particularly sort of valid um ratio for us at at the time of um at the current time of our investment and our Pro and our profile having said that it could be you the ratios that's that's the opening um Target it could be yeah 12 to 20% it all depends on the timings of new sales deployments and everything coming through and one good thing about this business we have high visibility of Revenue we can see it coming so we can control those costs especially bearing in mind that 75% of our cost base are people related.

CEO
I mean just to add to that by the way just on one of William's slides earlier you know our headcount has gone from fy21 71 people 103 in fy22 114 in FY 23 and 121 in FY 24 where we are now so you can see there was a real acceleration in headcount from you know 2020 through to 202 uh 20 23 so across that three-year period we really did invest you know adding 50 or 60 people and the vast majority of our cost bases people now a lot of that went into functions such as engineering and product um and now in terms of next year and the year after what are the things top of my list in terms of what we should be investing in uh for growth going forward it's not engineering and product really it's more the goto Market effort so it's it's more support for our partner ecosystem it's marketing product marketing um these areas but that doesn't mean anywhere near the kind of people investment that we've done over the last three years so that's going to continue to run at a that sort of slowed Pace that we're seeing from FY 23 to 24 so hopefully that helps sort of substantiate what what Williams just said.

CEO
I think the next one's for me William which is an addressable Market question um where is it uh what do you feel the marketplace for your services offers in terms of ultimate maximum turnover for your business I'm assuming there are only so many contact centers um in operation um yeah that's uh that's quite right so when we look at our addressable Market um if we look at the addressable market for our Focus areas today that would be um effectively the North America Europe and AZ although we're not really pushing hard into Mainland Europe it's mainly UK at the moment but if we if we took a look at that you've got about um I think there's about uh I'm looking at some data over here let's have a look uh about about four million agent positions something like that three three and a half four million agent positions across the those regions we predict that there's an addressable Market there of around 350 million pounds and the way that we get to that is we look at our average ARR per license that we can sell and we apply that to the amount of seats that are taking payments so there is data around the amount of agents that we think are taking payments so we think it's something like three and a half million agents across that um that addressable Market that are doing that now I think you have to incorporate into the 350 um you know revenues that we've already got that our competitors have got so you probably want to chop that by about another 100 million uh to give the kind of addressable Market that you're running at um so if you said 250 million as a perhaps a serviceable addressable Market is probably um an appropriate way to look at it um and then you know where do we think we can get get to.

I'm very focused on growth in this business you know we've got to profitability so we don't want to move back from that but we want to keep growing the business at you know 20 - 30% plus if we can do that then you can roll that forward over the next five years to see where we think we're going to be able to get to from you know 20 million um this year without me going into too many more specifics or setting any forecast for myself.

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ChatGPT version of the above with grammatical polishing, makes it easier to read:

CEO

William, there's a question from Tim K about the operational gearing of the business. He wants to know about the alignment of costs with revenues and when we can expect a shift towards increased profitability. I thought you might want to discuss the ratios we've been examining, particularly the GNA perspective relative to revenue.

CFO

James and I have an unwritten rule. Since day one, we've aimed to ensure that as our revenue grows, a portion of it contributes to the bottom line, rewarding our shareholders and moving us towards profitability and cash generation. This approach is reflected in the EIDR graph I showed earlier.

Currently, we're maintaining a ratio of approximately 2 to 1. For example, if our revenue grows by 20%, we aim to keep our cost base growth at 10%, ensuring that 10% of the revenue contributes to the bottom line. This ratio is particularly relevant given our current investment profile. However, these ratios can vary, potentially ranging from 12% to 20%, depending on the timing of new sales and deployments. One advantage of our business is the high visibility of revenue, allowing us to control costs effectively, especially considering that 75% of our cost base is related to personnel.

CEO

To add to what William said, as shown in one of William's slides earlier, our headcount has increased from 71 people in FY21 to 103 in FY22, 114 in FY23, and 121 in FY24. This significant growth in headcount, particularly from 2020 to 2023, reflects our investment in expanding our team by 50 to 60 people. Most of these additions were in engineering and product functions. Moving forward, our focus will shift towards market efforts, such as supporting our partner ecosystem and enhancing marketing and product marketing. This shift means we'll see slower personnel growth compared to the past three years, aligning with the slowed pace observed from FY23 to FY24. This should substantiate what William just mentioned.

CEO

I think the next question is for me, William, regarding our addressable market. The question asks about the ultimate maximum turnover for our business, given the limited number of contact centers in operation.

That's a great point. When we assess our addressable market, we focus on North America, Europe, and Australia/New Zealand, with a primary emphasis on the UK within Europe. Based on our data, there are approximately four million agent positions across these regions. We estimate an addressable market of around £350 million. This figure is derived by applying our average ARR per license to the number of agents processing payments. Our data suggests about three and a half million agents fall into this category.

However, we must consider the existing revenues captured by us and our competitors, so we might adjust this figure down by about £100 million, resulting in a serviceable addressable market of around £250 million.

Looking ahead, I am very focused on growth. Having achieved profitability, our goal is to continue expanding the business by 20-30% plus, annually. If we maintain this growth rate, we can project significant increases over the next five years, starting from £20 million this year, without setting specific forecasts at this point.

[adamb1978] 15/6/2024 09:38

Really depends on what you assume on opex Simon. Over the last 4 years, their opex has grown at roughly half the rate of turnover - last 4 years turnover cagr of 52% vs 27% for opex. I'd say that thats a fair assumption going forward, or perhaps opex growth might be closer to 60%/70% of turnover growth given more hires in the US?

I think your opex assumption above htough looks skinny.

re US listing, I was more thinking of a dual listing. TIG have done similarly, MXCT another one from a couple years ago. Might just drag the valuation up a bit

[simon gordon] 15/6/2024 09:26

Morning Adam,

Could £50m t/o equate to £23m PBT, taxed at 25% = £17m PAT, divided by 72m shares = 23.6p EPS.

450p divided by 23.6p = 19x p/e.

18p would equate to £13m PAT.

Can't imagine they'd go for a US listing, they're a toddler, they'd be lost. In the UK they can become a market darling, bit like IQG. Interestingly, the new PCIP NED is on the IQG board, they've just been bought by KKR.

[adamb1978] 15/6/2024 09:16

Hi Simon

Very good spot with those two roles. Does seem like the US side is humming.

£50m in 2029 would be about 22% turnover CAGR from 2023, which is entirely feasible, probably conservative if the US growth continues. I reckon that would lead to 18p EPS so 25x PE gets 450p. At that scale they'll be generating very good margins so 25x PE is very realistic. 450p and £50m also implies around 6x EV/ARR which looks fine.

Will be interesting to see whether they look at a US listing at some point. Probably want the US court case dealt with first.

Adam

[simon gordon] 14/6/2024 20:01

Hey Adam,

Today they published a vacancy for a Head of Marketing US based. There's also an opening for a Director of Product Marketing US based.

It certainly would be cool if they could rock some 30% years.

If they can hit £50m in 2029 the share might be more toward 450p. Does that compute?

[adamb1978] 14/6/2024 19:33

Hi Simon

I'd be disappointed with 20% growth, particularly if the US momentum continues as it seems to be.

Valuation also depends on whether you think the market values them on a PE or EV/ARR basis. The small placing a couple months ago was meant to fund more growth (ie headcount) in the US. That will obviously depress earnings a bit but ensure more future growth.

Anyway, I have something like 6p EPS in Fy26 and 10p in FY27, so 200p share price in a couple years? The growth and margin combination should lead to a decent multiple

Adam

[simon gordon] 14/6/2024 17:08

Hi Adam,

Hopefully, a DWP win and or a bullish trading update in July can get the share through 65p.

Baseline 20% topline growth for the next five years:

2025 - 22.8m
2026 - 27.3m
2027 - 32.8m
2028 - 39.3m
2029 - 47.2m


If you chuck in one 30% year it gets past £50m.

What valuations can you envisage for the share based on the above?

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Good piece on AI in the Contact Centre:

No Jitter - 14/6/24

Generative AI: Not the Droids You Are Looking For

Generative AI is a new tool and it’s still early. So far, it hasn’t done much, and we need to adjust our expectations that it might indeed be a while until it does.

[adamb1978] 13/6/2024 22:50

Simon
I'd be more worried if there wasnt any new but with the court case cleared and their channel partners blowing the doors off, I think risk here is low...

Adam

[simon gordon] 13/6/2024 16:53

Wonder if William Catchpole is continuing to sell down. Sold 200,000 shares in March, 24. Now he's not notifiable, he could be an overhang. Holds 2,000,0000 - 2.79%. He had added 400,000 last September before the trial.

Has he died and his estate selling down?

Defo looks like stale bulls at c.65p, three times it's hit it and fallen back in 24.


free stock charts from uk.advfn.com

[adamb1978] 12/6/2024 20:29

Hi Simon

re the US yes. Somewhat simplistic but taking your 15x market size in the US vs the UK, if you take PCIP's UK revenue and multiple it by even half of that 15x, the impact on the P&L would be nuts. Shame that they'd likely be acquired by then.

re the DWP tender, now that the appeal has been dismissed, you'd hope it would be straight forward. Changing supplier involves additional costs for the DWP to install the new system (probably tens of thousands), as well as training all its people on the new system etc. If the PCIP product is working well, you'd hope it would be a formality

Adam

[simon gordon] 12/6/2024 17:19

Hi Adam,

ECK state on their FY 24 slide-deck presentation that the US market is 15x the UK.

PCIP collected 250 new clients in FY 24 (850 total). ECK have a total of 230 clients. Once PCIP starts getting stuck into the Enterprise space through the likes of Genesys and Zoom the top line could power on - like you say for years.

The next big hurdle is the DWP tender. Worth £2m a year going forward, historically c.£1.35m per annum to PCIP. Tender news could be any day now. Lose that and down we go, win it and the share will get a strong bump.


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simon gordon - 05 Jun 2024

Based on the 2023 Prelims the company spent £2m on the UK case. Has now got back £1.3m and might try to claim another £0.7m.

The US case will in total cost around £2m.

At the moment they are down £2.7m (UK £0.7m & US £2m).

Sycurio is probably down £5.3m.

=====>

Watching the CFO again on the February 2024 Investor Meet webinar he mentioned the total legal bill will be £4.5m to £4.7m.

Maybe the UK case cost £2.3m and they'll be looking to try and get back another £1m.

US case costs £2.3m.

As it stands, they are currently down c.£3.3m (UK £1m & US £2.3m).

Sycurio is probably down £5.9m.

[adamb1978] 12/6/2024 16:48

Thanks Simon. Thats good news re Genesys. The US is a huge opportunity for PCIP and could sustain top-line growth for several years

[simon gordon] 12/6/2024 10:00

Genesys, a top five channel partner for PCIP, released their Q1 results yesterday:

SAN FRANCISCO–(BUSINESS WIRE)–Genesys®, a global cloud leader in AI-powered experience orchestration, today reported the results for the first quarter of its fiscal year 2025 (Feb. 1 – April 30, 2024). On the heels of a company record-setting fiscal year 2024, the Genesys Cloud™ platform continued its strong momentum, exceeding $1.5 billion annual recurring revenuei for the first quarter, growing more than 40% year-over-year. Notably, Genesys Cloud new bookings from standalone AI products were up over 2X year-over-year in the first quarter, including its largest ever seven-figure AI annual contract value (ACV) win as part of a large customer experience (CX) transformation with a community service and wellbeing organization.

...The average number of unique agents for each of the top 50 Genesys Cloud customers increased to nearly 10,500, a more than 20% increase year-over-year...



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Cavendish - 9/11/23:

Partner relationships have developed from initial trials to expansive channel opportunities, with PCI Pal consistently navigating upwards through partner tier structures, as the platform’s solutions gain the partner’s trust and focus. Through investing to achieve this status, PCI Pal is now excellently positioned to be upsold into the existing customer base of major partners, such as one partner where PCI Pal is currently used in only 2 of their top 50 deployments, which average c10k seats, and would each add over $1m of revenue to PCIP.

[simon gordon] 11/6/2024 11:41

Tech Market View - 11/6/24:

Eckoh enjoys life Stateside

Full year results from UK-based call centre payments specialist Eckoh, have revenue dipping -4% to £37.2m (FY23 £38.8m) as total ARR ticked up 1% to £30.8m (FY23 £30.4m). Group profitability improved with both adjusted EBITDA and adjusted operating profits increasing by 8% to £10.2m and £8.3m, respectively. Whilst Eckoh’s pivot to the cloud (see Eckoh sees a positive future in the cloud and work backwards) has continued to temper revenue growth in the short term, it is seeing positive improvements in recurring revenue and operating margins - increasing by 250 bp to 22.4% (FY23 19.9%).

The big plus for the Hemel Hempstead-headquarterd business is the progress it has been making in North America (48% of Group revenue and increasing) with a record level of new contracted business in the region, up 44% YoY to $16.8m, benefiting from the creation of a single commercial team there (see Cloud pivot helps Eckoh prosper in North America). This helped contribute to significant improvements in both total contracted business (up 52% to £52.6m) and new contracted business (up 29% to £18.7m). We caught up this morning with CEO Nik Philpot who explained “The first half of the year was all about excellent contract renewals, but the second half was all about new business wins, and we have built a strong sales pipeline of exciting new business opportunities, supported by the impact that the new PCI standard is having as well as the significant risk of operating work from home agents without security measures.” The US is also less mature from a security and compliance perspective than Europe providing significant opportunities with generally larger operators.

Looking forward, Eckoh expects to see growth in FY25 as existing accounts continue to expand. AI and bots in the contact centre, as well as hybrid working and associated security concerns, should help the business deliver on this. Management points to a positive start to the year with £8m+ of total contracted business signed year to date.

[simon gordon] 11/6/2024 11:29

Eckoh's FY is out today, the Presentation is worth a skeg:



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Interesting discussion with Chris Crosby a CX investor, he reckons Zoom is the only game in town, a huge fan:

CX Today - 7/6/24

The Evolution of CCaaS Platforms and What to Look for in a Provider

[citys2874] 06/6/2024 13:10

what his username on here?

[simon gordon] 05/6/2024 12:55

Citys2874,

Just to let you know your actions are driving Victor Value off the LSE board after posting his posts on ADVFN this morning. He's asked for the account to be closed as he doesn't want to be caught up in your ramping.

Why don't you apologise to him and tell him you will delete his posts on here?

[adamb1978] 05/6/2024 11:45

Hi Citys

Regarding that filing, can you explain why you think that it could imply that a truce has been agreed?

CHatGPT tells me that in the context of a U.S. court case, an "Order on Motion for Leave to Appear Pro Hac Vice" refers to a court order granting permission to an out-of-state attorney to participate in a particular case.

[citys2874] 05/6/2024 10:52

In the top 75 gainers on the leaderboard moving up nicely

[citys2874] 05/6/2024 10:43

in the top 90 gainers on the leaderboard risers now

[citys2874] 05/6/2024 10:37

buys coming in and see a major bounce up coming