"But seriously, 20-40% QtoQ?"
Are you talking revenues? I'm not touching them.
I'm thinking only about cash flows. And cash flows are resolved by a major order with an upfront payment.
Cash flows vary by 20-40% at the drop of a hat.
In terms of Wave's Dell and SME business, Q1 was a curiosity. We expected it to be weak. But the drop was much bigger than anticipated. Hard to extrapolate from a single instance, or to bend an expectation of what comes next. So unless/until there's a trend around the Q1 results, I'm inclined not to use them as a foundation.
Even so, I am anticipating a return much of the way towards the previous trend. I am basing this not on extrapolation from Q1 but simply on the apparent reality of the lack of serious dilution in May. At Q1 equivalent inflow rates, they would surely have had to dilute aggressively in May, as they did in April. For me, the lack of dilution hints at a tale of sales recovery. So April not so good, May a lot better.
But really, I think the reason I am thinking more positively is that everything confirms the fact that Wave has expectations of something exciting happening around mid-year. I am identifying this with the US vehicular contract with however many units that was (150,000-200,000 units?) at a price between $65 and $100 per unit. Server work is ongoing on that side of things. BiOS trials running alongside. So my guess is there's a $10-20m contract potential coming to fruition around mid-year.
I am also guessing the vehicular contract is the pilot/template for other contracts with the DoD. Hopefully, less integration work required in future. In turn, I think this leads to opportunities with OEMs (not just with PCs but also with other equipment), and dominos expanding outwards from there.
The contrast is between on the one hand, current investor sentiment (nasty accident in rear view mirror) and the fog surrounding Wave's immediate future (dilutions, unsafe harbour, opaque releases, history of over-promising), and on the other, the scope of the opportunity which I think is very large indeed, as I have always done. When the latter becomes visible beyond the Wave community, everything changes rather suddenly, I think. I see the completion of successful BiOS pilots and the announcement of the vehicular contract as the likeliest moment of change.
I am trying to get ahead of that moment. For me, the reduction of risk occurred at the end of May. So June 1 was the logical point at which to change my stance.
My optimismometer remains at 7, because it is based on actual facts. But my speculationometer (new tool) is moving to a 9!
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