SYT 0.00% 0.1¢ syntonic limited

Some observations from the 4C June 2017 Quarter "...the Company...

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    Some observations from the 4C June 2017 Quarter

    "...the Company anticipates that over the next several quarters, the bulk of the revenue will come from its high-margin, recurring revenue CSP licensing business." ( so similar or increased revenue as the CSP/SDK increases)


    "The Overpass service was “soft-launched” in the US on 30 June with major marketing campaigns commencing in early August. As a consequence, Syntonic doesn’t anticipate Overpass revenues having a noticeable impact to the Company’s overall revenue until later in the calendar year. " (not next quarter at the minimum)

    "The Freeway app distribution grew by over 21.5% last quarter with the largest growth in the Mexican market which saw a 101.6% increase in Freeway app downloads over the prior quarter. The Company continues to see steady interest and growth in Indonesia, Malaysia, and India.

    (Intial take up of the app was expected to be large then an expected slowdown, unlike the negative picture being painted by a few individual posters)

    "In the upcoming fiscal year, Syntonic will continue to expand its efforts in Latin America and Southeast Asia and anticipates conversion of current efforts into revenue generating deployments in CIS, Africa and the Middle East ---geographies where consumers are eager for affordable mobile access."

    The continuing alternating use of the words "calendar" and "fiscal" year ( even replacing the words " next or following quarters" on occasions) should be noted.The expansion into Latin America and SEA could be up to 12 months away from this statement.   Now also confirmed that previous European discussions are now off the table.


    "Verizon commenced deployment of the Freeway SDK in various data-free apps including those natively installed on Verizon-retailed LG K20 V and Motorola Z2 Play smartphones. Given the scale of Verizon’s subscriber base, Syntonic anticipates the Freeway SDK will exceed the App distribution in the upcoming quarter."
    "The Company reduced acquisition costs by 89% compared to Q3 2017 with an overall increase of 21.5% app downloads. The bulk of the user adds were through non-paid channels such as the Freeway in-app referral program which rewards users for recommending Freeway to their friends and organic growth where users find out about the app through other means such as direct search, social marketing, and other media. As a result, the marginal cost for user acquisition in Q4 dropped by nearly 500%. Syntonic is encouraged by the cost efficiencies developed last quarter and will leverage the same tools and developed know-how for Freeway Overpass’ user acquisition in the coming quarters."

    It's clear Freeway in SEA/India isn't currently bringing in and sort of "meaningful" revenue at present and I have been a believer for the last 12 months it is a POC for the telcos as is still at very early stages. The learnings are being transferred to Overpass.

    I'm of the opinion that if the OTT/Overpass didn't come into play for Verizon last year then Freeway in these regions would have been been a lot more attention, would be more successful and traction in LATAM would be more advanced. They aren't and for very good reason, a positive in my eyes with the prioritising clearly mentioned in the last Q&A.

    With the Overpass coming into play, as a reminder that although we are selling wholesale data packages for "unlimited content" packages we are also locking in revenue from gaming apps in these packages which will increase in the coming quarters.

    I don't see much new investment until "meaningful" revenue materialises

    CC
    Last edited by CaymanCeltic: 20/07/17
 
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