Dan good quick take.
I have not listened to the entire call yet. I got through about 48 minutes, but to be honest, I did not listen much when Jain started to speak and will have to listen again.
I questioned why I did not listen to Jain as I got busy with other things and I guess it stemmed from his initial 'reiteration' of most things that were already said: The revenues, the beating of guidance, the merchant growth, ect... I was wary of smoke and mirrors and spin. I felt it a waste of my time...sorry for the personal but my visceral response tells me something.
With that said, I agree with you. INSP is moving on the right track, but time is still a definite requirement.
I hope to start to buy in again before next earnings and think the price may give me an opportunity to pick some up below 1.20 at some point. We may even trade lower at some point.
Likes: (1) Future Guidance raised WITHOUT including Verizon. *Money is seen coming from somewhere*
(2) INSP will pay about 200,000 in taxes for European operations. Not sure how taxes overseas are applied, but in the States, you have to be making a profit to pay taxes. Here's hoping that Europe is turning a profit.
3) Merchant accounted for 36% of revenues. Good growth going on there. Next Quarter Merchant to be 35% of revenues. *Shows growth taking place as X-mas quarter is a seasonally strong or strongest quarter, yet we are growing in the 'off peak' times as well. Wait until next X-Mas! Merchant is shaping up to be the big ticket thusfar.
4) Wireline was 44% total revenues. An increase of about 100 million more querry hits than last quarter.
(5) And a BIG 5 is the Gross Profits coming in at 71% for the quarter and guidance raised on 2002 Gross Profits from the low 60%'s to the high 60's or low 70%. ****This is so key in future price modeling because profit margins like these are truly the new economy. Unheard of really to get profit margins in the 70% range. Economies of scale, when they kick in and INSP can keep prices down will be able to compete on price and blow others away. They should be able to get the most bang for the buck and I feel INSP is a leader in Maximizing Gross Profit Margins.***** Stay tuned to this number. INSP credited Merchant revenues for the increase in GPM due to the relatively low fixed costs INSP has to deliver their solutions.
Dislikes:
(1) 20% revenues from Wireless. INSP is supposed to be the 'Seller of the Picks and Shovels' of the gold miners (per Jain). That is not happening yet. This will take time. Wirless active users is not growing (much). I think the increase since last quarter was 70,000 'active' accounts, with 'active' defined as anyone that uses a data services at least once in the quarter. INSP had an average of 1.3 Active users with an average revenue generation of $1.58 per Active User. Good metric to watch going forward.
Wireless infrastructuer is the core business plan of this company. They have to generate economies of scale to hit the big time.
(2) Two clients are generating over 10% of revenues Ovature and Verizon. So, How much over 10% ARE they generating AND (this is a double edge sword and can be very positive) what is up with excluding Verizon out of future guidance?
I think it is a negotiation thing going on. I believe INSP was successful in the down market as far as aquiring market share via attractive pricing and is attempting to move away from that (increase their fees). This is all pure speculation on my part.
Also as a positive, if two comapanies are producing some 20% or MORE to total revenues, is it a matter of time before all the other clients start adding more $$ to the bottom line? I am sure INSP is in some markets, via their clients on a 'Hope that client makes it' basis, and INSP is not making close to half the money they can while they wait for things to take off.
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This is my quick take and not an exhaustive listing of my notes I've taken.
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No time to spell check.... |
