CLICK HERE to access the event replay.
TOPIC TIMESTAMPS:
4:58 – Why the freemium-to-premium model hit a wall (OPM% trough)
10:15 – LogMeIn Pro pricing strategy drives growth reacceleration
14:00 – New pricing strategy ALMOST closed the gap between customer acquisition spend and revenue from new customers
18:20 – Product revenue segmentation roadmap and why management needed to veil it
25:56 – By Increasing revenue from Pro, mgt accelerated their own product’s core problem
29:00 – Why you shouldn’t Short LOGM on account of competition fears in the collaboration space
33:30 – How management is using the LOGM Pro strategy on GoToMyPC product
36:00 – M&A roadmap in order to meaningfully reach the new 3 target areas
41:05 – Why street might be incorrectly modeling cash flow and why 1Q18 comp is a tough one
46:30 – The 2 things (at minimum) we need to see for this to be a great LONG
54:40 – Concluding points and Q&A
ELEMENTS OF OUR CONCLUSION
- Greater need for M&A to fill in forward revenue growth promises than advertised
- Inconsistent KPI
- Even the most challenged secular part has resilient and stubbornly growing revenue (thus far) from high price increases & high churn segments
- A canvas of opportunity that will keep the needle moving
- Downside risks on topline estimates, upside risks on FCF
- Low-msd% topline growth sustaining through 2019
- Trading sub-20x FCF
- OCF margins moving higher
- 10% of the stock getting returned to shareholders in next 18-24 months
- A management team with a good track record for making it all work plus a balance sheet that is open for M&A to accelerate transition to a more traditional enterprise software business model
To access the replay of our call click HERE.
