Unearned revenue is more meaningful:
Poised to see operating leverage and working capital financing in place (as also noted above):
More "platform deployments":
Last month, we included a video featuring the late investment legend Philip Carret. We uncovered an insightful article from 1999 where he shares his advice - it's well worth a read.
Similar to Peter Lynch's common recommendation, one of Mr. Carret's guidelines is as follows -- directly from the article:
- For your best investment ideas, look around you. I've been following this strategy for more than 70 years.
- Example I: In the early 1920s, not all water was metered in New York City. That wasn't going to last forever because water is a scarce resource, and there was no incentive for people to conserve water. Sooner or later, they were going to have meters for everyone. So I bought stock in a company called Neptune Meter, and it turned out very well.
Putting (1) through (3) together with the Mediasite franchise -- as we've previously established -- suggests Sonic Foundry is poised to deploy more "meters" around the globe. The company's +19% Y/Y organic revenue growth in fiscal 2009 (end September) also indicates that the "installed base" is growing. Unlike water meters*, "everyone" is not going to have Mediasite, yet the addressable market is sufficiently large and expanding.
(*side note: water meter company Badger Meter (BMI) is an interesting little company)
Recall our analogy last May, where we compared the Mediasite solution to a jet engine:
- A less-than-perfect but still relevant analogy might be the following: Mediasite is to Webcasting as a jet engine is to flying. Many companies no doubt tried to make jet engines through the decades, but only a handful emerged as market leaders (e.g. General Electric, Pratt & Whitney, Rolls Royce). For Webcasting, Mediasite is increasingly the go-to platform with quality and reliability both immensely important since many customers (e.g. schools) use the system daily to capture and archive hundreds of hours of content.
Disclosure: long SOFO.
© 2010 Jeffrey Walkenhorst
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