Dear Fellow Stock Gumshoe Readers,
As the world is focused on reporting negative news, I interrupt your regular scheduled programming to bring you an irregular update.
To refresh your memory, I wrote and won the contest in late 2019 with my initial write-up on mCloud Technologies (name change from Universal mCloud). The title was “In a Land Filled with Goliaths, You Want to be Long a David”.
The good news is this high-growth, giant slaying story is still alive, well and ready to exceed expectations with a strong second-half 2020 and super 2021.
Please see below my update with five bullet Points (five stones) our David released last week.
1) mCloud reported FY 2019 and 1Q 2020 results on Tuesday morning May 26th, the highlight being the ramp up in AssetCare recurring revenue and improving gross margins. AssetCare recurring revenues increased 10X year-over-year, and was up 130% from 1Q 2019 to 1Q 2020. Total 1Q revenues of $6.6 million, of which 60% are derived from AssetCare, nets an annualized 1Q run rate of $16 MM in recurring revenue, up from $12 MM at year-end. Gross margins improved from 59% for the full year 2019 to 62% in 1Q 2020.
2) Also on the 26th, one investor close to the company that has been a supporter since the IPO, in a sign of acknowledgment of the strong growth and execution, stepped-up to provide additional capital of C$4 Million as a catalyst to further the company’s NASDAQ application process.
3) As a further sign of of confidence in the companies future, on May 28th CEO Russ McMeekin, in the narrow window allowed purchased over 20,000 additional shares. Nothing better that seeing the CEO put his own money where his mouth is.
4) From discussions on recent conference call and public information, mCloud is getting uplifted to Toronto Big Board (TSX) in the next few weeks. And depending on next stage of process, mCloud will also be trading on NASDAQ very soon too. The NASDAQ catalyst will formally introduce this modern day David / Goliath story to the world and help narrow the significant discount mCloud trades versus it’s SaaS peers (2x vs. 8x, 10x, 12x, etc. price-to-sales).
5) Finally, and maybe even the bigger highlight of the week, mCloud revealed Surrogate Plant Laser Scanning Support Using AR Headset. This allows asset owners to remotely and accurately create the scans for their 3D digital twins. This could be an adoption accelerator going forward (note the monthly recurring value of a digital twin asset is as much as 6X greater in value than their early adopted asset types).
mCloud technology is providing solutions not even contemplated pre-Covid that are now proving invaluable to plant operators, and allowing the company to continue to serve clients and connect assets during these difficult times with limited travel options.
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Customer’s site personnel operate scanner equipment using the Artificial Reality (AR) headset technology while a remote, live instructor supports scanning activities and troubleshooting needs. The trend of “remote connected “ assets and workers is this Covid and post is really poised to pick up for mCloud. Once complete, customers simply ship the equipment back. mCloud processes the data and sends a 3D Digital model back to the client.
Stay healthy, Stay Safe and Stay Long Our David (MCLD – TVX / MCLDF – OTC)
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