If Wave paid, dey was had.
Here's my revenue analysis from snackman's board, which shows that the "analyst" appears to be way off the pace. Pity the poor innumerate folks who rely on these kinds of reports to derive their expectations. He points them to $9.6m where Wave itself seems to imply something in the orbit of $11m or so under any reasonable assumptions. If Wave group actually made $9.6m, that would be a catastrophic consolidated result!!
Text of Wave's recent form sent to the powers that be:
"Based on the Company’s current estimates and depending on the completion of the accounting error assessment for its Safend subsidiary, the Company expects to report a net loss for the year ended December 31, 2011 of approximately $10.5 million as compared to a net loss of approximately $4.1 million for the year ended December 31, 2010. Factors contributing to this estimated increase in net loss include (i) an increase in non-Safend stock based compensation of approximately $2.6 million as a result of increased estimated fair values for the 2011 stock-based payment awards, (ii) an increase in non-Safend salaries and related benefits totaling approximately $5.7 million in support of its growing customer base, (iii) an increase of approximately $1.8 million in non-Safend professional services expenses, consisting primarily of acquisition costs, recruitment fees and outsourced engineering services and (iv) the net loss of Safend, a wholly-owned subsidiary acquired on September 22, 2011, the sum of which are expected to be partially offset by an increase in non-Safend net revenues of approximately $8.3 million, primarily as the result of revenue recognized on its large class customer license upgrades which were recognized ratably during 2011 and for which the Company had not achieved vendor-specific objective evidence."
Here are the numbers I see in this report and in the published Wave results:
1. The increase in non-Safend net revenues was approximately $8.3m for the year ended December 31, 2011 (see above). The increase isn't a Q4 phenomenon: it relates to the whole year, with license upgrades recognised rateably through 2011.
2. The net revenues for Wave in 2010 (obviously before the Safend purchase) were $26.1m ($26,051k, in fact).
3. So, for 2011, the total Q1-4 non-Safend net revenues were $26.1m + $8.3m = $34.4m. The increase in 2011 (see 1) adds very simply to the 2010 number (see 2).
4. Wave group revenues for Q1-3 were $7.5m + $8.1m + $9.5m = $25.1m (or $25,104k to be more exact).
5. Safend's contribution to the group was between $0.1m and $0.2m in Q3.
6. So Wave company revenues (ex-Safend) in Q1-3 were $25.1m (see 4) less $0.1m or $0.2m (see 5) = $24.9m or $25.0m.
7. This means that Wave's company only (ie ex-Safend) revenues for Q4 were $34.4m (see 3) less $24.9m or $25.0m (see 6). ie between $9.4m and $9.5m.
So this is a fairly precise number which Wave has provided for the company only (ex-Safend) revenues. $9.5m is fairly much the upper bound and $9.4m is fairly much the lower bound using the numbers Wave has provided and supposing that some rounding is involved.
Which means either (a) the analyst thinks Safend is contributing around $0.1m to group revenues, which is ridiculous; or (b), he has forgotten to add Safend revenues to the top line (in spite of mentioning that they should make a useful contribution to revenues in Q4 and thereafter). Safend revenues are likely to be somewhere between $1.3m and $1.8m on the basis of past performance. I am not making a precise prediction of group revenues here - hence the broad range. But my view is that it is sensible to be thinking of somewhere around $11m for Q4 group net revenues give or take a bit (using published figures for Wave's ex-Safend results and then estimating Safend on top).
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