@fawr Interesting take but you miss a few important points:
1. Connected Cost and other new modules add additional uplift potential to a project. Connected Cost has 3 pricing levels, but at the top level, it would add another 6 basis points to the project value of a project like Snowy 2. The same for other new value-add solutions like Project Packages.
2. Vertical integration matters. It's the project owner or main contractor who pays for the use of the platform, but all of the sub-contractors then also have to use it. In a mega-project, there are thousands of engineers, architects, builders, draughts-people and other small companies who end up getting acclimatised to using Aconex. This helps to establish Aconex as the industry standard.
3. Snowy 2 is just one of many mega projects that Aconex is adding every month. After the initial CAC and on-boarding costs have been met, these projects all become like 90% annuity streams for the life of the project. It's like many streams joining together to create a revenue river. Every mega project matters in this respect.
4. You are right about enterprise agreements being significant, but you missed the fact that Aconex inked 36 new enterprise agreements in ANZ alone in FY17. Each of these enterprise agreements spins off new projects, small and large, every month, with very low CAC and on-boarding costs. In ANZ, only 2 of these new enterprise agreements were announced- Fletchers and Laheys.
In ANZ, 68% of all revenue ($53.3m in FY17, up 9% YoY) now comes from enterprise agreements, and the EBITDA margin is 39%.
5. As well as Snowy 2, a series of very large mega-projects, up to $11 bne in value, have just been won by Australian enterprise partners like John Holland, Lend Lease and CIMIC, who build all their projects in the region on Aconex.
So each new mega-project should be seen as adding to the big picture, building the vision.
Here is Leigh Jasper on the ANZ experience:
Starting with the Australia and New Zealand region, our customers continue to standardise on the Aconex platform, with ongoing conversion of project customers to enterprise agreements.
We signed 36 new enterprise agreements in FY17, including many first-time customers. 68% of revenue and growing is now in enterprise agreements and we had a 100% renewal rate.
We are winning customers on our Connected Cost product and starting to roll out the Project Claims 5 component and we continue to grow share of wallet with existing customers with product up-sell. We have been extending our key account management capabilities to provide further value to our customers
https://hotcopper.com.au/threads/an...script.3644271/?post_id=26825703#.WbMJYMig-Uk
$5.5bn Westgate Tunnel (artists impression) A recent John Holland/ CIMIC win, being built for Transurban and the Vic Gov't
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This post is based on my own research and is not investment advice. When making investment decisions, always DYOR.