A good thing about EIP financing is the positive feedback loop: growth triggers an agreed-upon milestone (the criteria for which have not been communicated), which releases a new loan tranche to be drawn down, which drives the development of more models and sales, which further accelerates growth. Rinse and repeat.
Not a single customer has been lost so far, the use of different models by customers is growing, Aiforia is constantly creating new models, the number of customers is growing (Paris, new hospitals in Spain), and implementations are progressing now that the Italians finally got their scanners, so it doesn’t look too bad. One can, of course, be concerned about the slope of the growth curve.
The decrease in revenue seen now is due to the fact that new contracts generate revenue steadily rather than upfront like before, with a large lump sum at the beginning. Therefore, it is unfair to compare this H1 to previous years.
If the H1 seen now is the baseline going forward, so be it, because it is easier to improve on a weak result than a strong one. There has to be some starting point against which development is compared. Surely there has been no accounting trickery here, but rather an agreement with the EIP on how revenue will be measured in the coming years. And the implementation delay, as another reason for the drop in revenue, also means that the money is definitely coming and will show up then.
One more good point. Both the CEO and the Chairman of the Board are shareholders with their own money, so in their decisions they also consider the interests of legacy owners. The EIP loan is of that nature, even though it has its financial costs (interest and synthetic warrants).
Webcast transcript: Inderes
Aiforia’s expansion into predictive models (which is inevitably the future) has already been underway, but also into image management and workflow? It would certainly be an advantage for the customer to get as many parts of the diagnostic process as possible from a single provider.
Targets remain unchanged, even though the market got spooked
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