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Post by JHam on Aug 1, 2018 10:53:53 GMT
Here is one more I have been watching and finally pulled the trigger yesterday. Shares outstanding: 5.9M Current market cap: $12.9M Cash: $2M (approx) Total liabilities: $5M Revenue: $12.4M for fiscal year 2018 Brief summaryCounterPath is a software telecommunications company. They design, develop and sell software and services that enable enterprises and telecommunication service providers to deliver Unified Communications (UC) services, including voice, video, messaging and collaboration functionality, over their Internet Protocol, or IP, based networks. We are capitalizing upon numerous industry trends, including the rapid adoption of mobile technology, the proliferation of bring-yourown-device to work programs, the need for secure business communications, the need for centralized provisioning, the migration towards cloudbased services and the migration towards all IP networks. Basically they provide a digital communication platform to big telecommunication providers. They have huge clients such as Bosch, Oracle, NTT, Rogers, Cisco, Ericsson, Verizon... and the list goes on and on. The stock is currently trading at all time lows. Even with all of these big clients, they've never really been able to be profitable and have it reflected in the share price. They basically go by contract so revenue fluctuates per quarter. However, it looks as though they have finally carved out a way for growth in the future. What interests me most though, is that there are a lot of signs indicating they'll potentially be bought out by a bigger who fish who wants CPAH as their tech wing. The founder of the company and gazzillionaire, Sir Terry Matthews, has a history of making small software/tech companies from scratch and selling them for a fortune. He founded Mitel via a $4,000 bank loan, sold it later for $2.2B. Took that $2.2B, rolled it into his next new company, Newbridge Networks, sold that one for $10.8B. He is CounterPath's Chairman of the Board and largest shareholder. The other thing I like is that insiders have been buying this stock like crazy the past couple of years and continue to buy now. Not sure if that is a sign that they feel (know?) they'll be bought out or not. However, when you look at what they do, and how much clients depend on their technology, and see who the founder is, the company was pretty much made to get bought out, in my opinion. I finally dove in yesterday and opened a medium position at $2.20. I'm not sure how I'll play this. There is a chance they'll dilute in the near future, which doesn't bother me too much, for the reasons I've mentioned above. Insiders own this company at a very high cost basis and therefore I think naturally have the interests of shareholders in mind. The share price was $3.25 last week when they announced pretty good earnings, but I think people feared imminent dilution and bolted. With 90% profit margins as long as they get some contracts they could be able to avoid needing to raise cash. But I won't be surprised if it happens and I think it will be minimal. Must be nice for a company when they want to raise money to be able to have their chairman dump in a couple million, lol. SA: seekingalpha.com/article/4189143-counterpath-seems-found-path-growth
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Post by JHam on Aug 1, 2018 11:08:01 GMT
Summary of their 10-K: www.counterpath.com/counterpath-reports-fourth-quarter-and-fiscal-2018-financial-results/CounterPath Reports Fourth Quarter and Fiscal 2018 Financial Results Annual Revenue Grows 16% as Company Continues Transition to Recurring Revenue Vancouver, BC, Canada — July 25, 2018 — CounterPath Corporation (NASDAQ: CPAH) (TSX: PATH) (the “Company” or “CounterPath”), a global provider of award-winning over-the-top (OTT) Unified Communications solutions for enterprises and service providers, today announced the financial and operating results for its fourth quarter and fiscal year ended April 30, 2018. Fiscal 2018 Financial Highlights Annual revenue of $12.4 million for fiscal 2018, an increase of 16% over the $10.7 million in revenue for fiscal 2017.Quarterly revenue of $2.8 million for the fourth quarter of fiscal 2018, compared to revenue of $2.4 million for the fourth quarter of fiscal 2017. Subscription, support and maintenance revenue (revenue of a recurring nature) grew to $4.3 million year-over-year, representing 35% of total sales for fiscal 2018. Fourth quarter subscription, support and maintenance was $1.2 million or 43% of total sales. Gross margin of 87% in fiscal 2018, compared to gross margin of 84% in fiscal 2017. Non-GAAP loss from operations of $2.2 million for fiscal 2018, compared to non-GAAP loss from operations of $2.1 million in fiscal 2017. Net loss of $3.2 million, or $0.59 per share for fiscal 2018, compared to $2.5 million, or $0.52 per share, in fiscal 2017. Non-GAAP net loss of $2.2 million, or $0.40 per share for fiscal 2018, compared to non-GAAP loss of $2.1 million, or $0.45 per share, in fiscal 2017. Cash of $2.3 million as of April 30, 2018 compared to $2.1 million as of April 30, 2017. Management Commentary “We made progress on several fronts in FY2018,” said Donovan Jones, President and Chief Executive Officer. “We managed double digit growth in revenue, while continuing our transition to recurring revenue. Our recurring revenue increased to a record level of $4.3 million, representing over a third of our total revenue. The team has been working hard on improving our cloud-hosted collaboration platform and is ready to roll it out aggressively in FY2019. Our team-based service combines instant messaging with HD voice and video, on any device, enabling a business user to enjoy a secure communication experience, all within one application. There is a tremendous market opportunity for collaboration products and solutions as the enterprise collaboration market size is estimated to grow from $35 billion in 2018 to $60 billion by 2023. For FY2019 we will be focusing on increasing the marketing and sale of our own services to continue to drive recurring revenue. We will be focusing on recurring revenue both through selling to service provider customers, as we have done through our recent three-year $1.8 million agreement with a North American Tier 1 service provider, and by migrating our existing base of customers with perpetual software to hosted services, as we have done with our recent agreement with a leading contact center vendor. We are also now better positioned to offer our products and services to large enterprises with the solidification of our Oracle partnership this last spring. Finally, we expect to target small and medium sized enterprises through our upgraded e-store platform, where we will be introducing new communication services throughout the year that should further drive our monthly recurring revenue,” continued Jones. FY2018 Business Highlights Signed a contract with a North American Tier 1 service provider to offer a solution built on the Bria Softphone and Stretto™ Platform worth a minimum of $1.8 million over a three-year period. Launched Stretto Collaboration, a cloud-based service which integrates voice, video, messaging and presence with collaboration over any network, from any device, anywhere, which will enable teams of up to 200 people with tools to drive productivity and cost savings. Partnered on an integrated cloud platform and services solution with Oracle Communications at the Enterprise Connect conference in Orlando, where we showcased an “Always Connected” enterprise experience, enabled through improved quality and reliability of voice calling and messaging to elevating communications to full HD audio/video conference rooms. Announced the availability of Stretto Platform 2.0 with support for premises-based push notifications, cloud-ready installations and usability enhancements. Announced Bria for Salesforce support for Lightning, integrating any communications platform with business process and customer management. Secured distribution partnerships with Telegate, Unified Communications Co., Ltd. and TaraSpan, expanding opportunities into Australia, Japan, Singapore and India. Awarded a patent that optimizes how users will leverage their presence and location to intelligently route real-time communications across mobile and IP networks. Reached a company milestone as X-Lite, our free client, achieved millions of users in over 190 countries, providing a base for growth for our SaaS-based offerings. Financial Overview (All amounts are presented in U.S. dollars and in accordance with accounting principles generally accepted in the United States (“GAAP”) unless otherwise specified.) Revenue was $12.4 million for the year ended April 30, 2018 compared to $10.7 million for last fiscal year. For fiscal 2018, software revenue was $6.3 million, compared to $5.4 million for last fiscal year, subscription, support and maintenance revenue was $4.3 million, compared to $3.9 million for last fiscal year, and professional services and other revenue was $1.8 million, compared to $1.3 million for last fiscal year. Operating expenses for the year ended April 30, 2018 were $15.2 million, compared to $13.6 million for last fiscal year. Operating expenses for fiscal 2018 included a non-cash stock-based compensation expense of $0.6 million, compared to $0.8 million for last fiscal year. Sales and marketing expenses were $4.2 million for the year ended April 30, 2018 compared to $3.8 million for last fiscal year. For the year ended April 30, 2018, research and development expenses were $5.5 million and general and administrative expenses were $3.9 million, compared to $4.8 million and $3.2 million, respectively, for last fiscal year. Foreign exchange loss for the year ended April 30, 2018 was $0.4 million, compared to foreign exchange gain of $0.5 million for last fiscal year. The foreign exchange gain (loss) represents the gain (loss) on account of translation of intercompany accounts of the Company’s subsidiary, which are maintained in Canadian dollars, and transactional gains and losses resulting from transactions denominated in currencies other than U.S. dollars. Net loss for the year ended April 30, 2018 was $3.2 million, or $0.59 per share, compared to $2.5 million, or $0.52 per share, for last fiscal year. As at April 30, 2018, the Company had $2.3 million in cash, compared to $2.1 million as at April 30, 2017.
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Post by JHam on Aug 1, 2018 14:26:08 GMT
Added another little bit at $2.24.
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Post by lcd on Aug 1, 2018 15:04:48 GMT
JHam, this is an interesting company. I think the soft phone market is pretty saturated but having their founder's name recognition alone must help with market penetration. What I think differentiates them is the Stretto platform and the Bria integration with Salesforce. I can see that integration helping significantly with sales and maybe even generate buyout interest from Salesforce someday.
I will do some more digging but thanks for sharing your findings with the board!
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Post by JHam on Aug 1, 2018 15:11:51 GMT
JHam, this is an interesting company. I think the soft phone market is pretty saturated but having their founder's name recognition alone must help with market penetration. What I think differentiates them is the Stretto platform and the Bria integration with Salesforce. I can see that integration helping significantly with sales and maybe even generate buyout interest from Salesforce someday. I will do some more digging but thanks for sharing your findings with the board! Yes exactly. It sounds like you are pretty familiar with this area. It would be great if you share anything you find with us. Here is the latest 10-K just released last week: s3.amazonaws.com/filings.irdirect.net/data/1236997/000106299318003013/form10k.pdf
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Post by lcd on Aug 2, 2018 1:18:23 GMT
I am no expert in VoIP or anything telecommunications related, but I work in software development and we are always looking for differentiators and expansion of competencies in parallel to our core lines of business. I saw the Salesforce integration for the former and Stretto platform as the latter. After looking into it a bit more, there are several companies that offer VoIP with Salesforce integration but CounterPath does appear to offer a higher quality business focused solution than the few competitors I saw.
I took a very small position today at $2.20 with some of the odd lots money I had from selling RDHL earlier this week. I will do more research this weekend.
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Post by JHam on Aug 2, 2018 5:15:12 GMT
I am no expert in VoIP or anything telecommunications related, but I work in software development and we are always looking for differentiators and expansion of competencies in parallel to our core lines of business. I saw the Salesforce integration for the former and Stretto platform as the latter. After looking into it a bit more, there are several companies that offer VoIP with Salesforce integration but CounterPath does appear to offer a higher quality business focused solution than the few competitors I saw. I took a very small position today at $2.20 with some of the odd lots money I had from selling RDHL earlier this week. I will do more research this weekend. Awesome, thanks! Here is a snippet from a SA article two years ago highlighting some of the difference between CPAh and the competition: seekingalpha.com/article/1561272-acquisition-target-counterpath-corpCompetitors
So, what is the downside? Skype is the biggest digital telephone software entity out there, but has Skype connected with any of the large distribution players or system operators, like Ericsson or Cisco or Alcatel or AT&T or Verizon? No. In fact, their strategy is distinctly anti-social. They intend to steal all of AT&T's and Verizon's business right from under their very eyes. Their plan was to use their huge installed base of Windows users to integrate its telephone software. But this cannot work as in the past because now the installed base of computer operating systems now includes a huge mobile base of Android and Apple computers (smartphones and tablets). A big problem for MSFT.
What has become of the other small start ups? This is what my research has turned up:
Teleo - bought by Microsoft in 2005 Grand Central - bought by Google in 2007 Gizmo5 - bought by Google in 2009 Jajah - bought by Telefonica in 2009 GIPS - bought by Google in 2010 Mirial - bought by Logitech in 2011 Skype - bought by Microsoft in 2011
I was surprised that a small firm named Vivox, which had only games companies on its customer list boasted that it was the power behind T-Mobile's Bobsled. I looked again at their customer list before writing this piece, and I can no longer find T-Mobile on it. So maybe T-Mobile found that more expertise is required. No doubt some telephone companies will try to develop their own telephone software, as Telefonica did. But Telefonica's offering followed from its purchase of Jajah (from the list above). None of the other system operators has purchased a telephone software company. The problem these companies must overcome is that their software must run nearly perfectly all the time or it is worthless. CounterPath's computer software has been tested over nine years. Their Android and iPhone applications have been out for over two years, and were probably in testing another year or more. It will be hard for telephone companies to get this kind of testing done in the short window before they will need to bring this software to market. (After all, Skype, whatever its shortcomings, with one third of all international call minutes is breathing down everybody's neck). This brings up a small, tiny, infinitesimal, chance that the major system operators (AT&T, and the like) will band together to buy CounterPath to share the technology, as one of the last substantial independent telephone software companies available.
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Post by JHam on Aug 2, 2018 5:19:46 GMT
And while we are at it, this from the same article as above:
The software is called Bria, and it is the defacto standard for the industry
Most people see these features on Skype, and CounterPath's Bria offers this same software, but targeted to the higher security needs of business. Hence, it has equipped many companies with this new technology - Amazon, Citibank, Coca-Cola, Bosch, and others. But most of the companies they have provisioned are unknown to shareholders because they were sold through the company's extensive list of distributors - Alcatel/Lucent (ALU), Ericsson (NASDAQ:ERIC), Cisco (NASDAQ:CSCO), Avaya, Genband, BroadSoft (BSFT), Oracle/Acme Packet (NYSE:ORCL), Huawei, Mitel (NASDAQ:MITL) and Metaswitch. Basically, all of the important players. And because all of the important equipment providers use Bria, I believe it is the de facto standard for the telephone industry.
CounterPath cites the cost-savings enterprise example of Bosch in Germany, for example. Bosch found that 40% of all its calls were intra-campus calls (that is, within the company). For this, no third party exchange, like AT&T (NYSE:T), or in Bosch's case, Deutsche Telekom, is needed. In effect they set up their own network (their own intra-mural telephone company) with the ability to tap the third party legacy exchanges as needed. There is a real, self-evident savings in this.
In October of last year, CounterPath inked a deal with a carrier for this enterprise service, which could easily be the largest referral source anyone could ever ask for - Nippon Telegraph and Telephone (NYSE:NTT), which is the largest telephone carrier in the world.
I would expect that all telephone companies will be moving over to this digital telephone service in the next few years. Verizon (NYSE:VZ) says that all of its calls will be digital by 2016. So far, only one system operator has provided Skype-like service to its customers and that is Rogers in Canada. CounterPath provided the interface software, Skype-like software, for that installation.
That system operator experience with Rogers (NYSE:ROG) means that as carriers consider switching over, CounterPath may very well be the one that moves to the top of the list of software providers. Why? Well, suppose you are the one charged with this changeover decision for a big carrier, like AT&T or Verizon, who will you choose? Probably you are going to go with the one that has the most experience with big installations, the one with the most SIP telephone programmers in the world, the one with the product that has received the most commercial testing in the world, the most awards, the one that has developed system management tools with its installation at Rogers like their Client Configuration Server, the one big corporations are using around the world, and that would be CounterPath.
And speaking of system wide deployments, we don't think it is such a stretch to think if NTT is happy with its experience on the enterprises it sets up with Bria, that they might use CounterPath's software throughout their system.
Like a lot of developmental companies, I expect that the company will be bought out by some larger company. I expect that that potential acquirer will be one of its distribution partners. One that wants to get ahead of the others. Even the smaller companies in the list above may have rich venture capital parents that may want it for their offspring. Avaya, for example, is owned by Silver Lake Partners, which got a windfall from its $8.5 billion sale of Skype to Microsoft (NASDAQ:MSFT) (so it is comfortable in the telecom area, though it appears Silver Lake is distracted. They are spending a lot of their loot for Dell Computers even though other savvy bidders have dropped out).
A recent favorite target of speculation among CounterPath investors regards Acme Packet, which was bought by Oracle for $2.1 billion. Oracle has a treasury of $20 billion. A price of $10 for CounterPath would cost a little over $400 million, which would be a mere bagatelle. But others have big treasuries. Cisco has a treasury of $48 billion, and is one of CounterPath's oldest customers.
The reason Acme Packet has got CounterPath's investors' attention is because Acme Packet, which worked with CounterPath on Rogers and Bosch, announced that they are partnering with CounterPath to produce better-than-Skype performance.
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Post by JHam on Aug 2, 2018 12:35:08 GMT
finfeed.com/small-caps/technology/vonex-appointed-counterpath-strategic-partner/Vonex appointed CounterPath strategic partnerTelecommunications innovator Vonex Ltd (ASX:VN8) has entered into a marketing and partnership agreement with CounterPath Corporation (NASDAQ:CPAH |TSX:PATH) to work on new customer growth in Australia.
CounterPath is a global provider of award-winning Unified Communications solutions for enterprises and service providers. Its product suite includes Bria 5, which has millions of global users and leverages over ten years of softphone experience and replaces the need for a telephone to connect to a VoIP phone service, or hosted PBX extension. Its proprietary Stretto Platform enables the provisioning of desktop and mobile VoIP software.
Vonex is a full service, award-winning telecommunications service provider, selling mobile, internet, traditional fixed lines, hosted PBX and VoIP services, predominately to the small to medium enterprise customer under the Vonex brand.
The company also provides wholesale customers, such as internet service providers, access to the core Vonex PBX and call termination services at wholesale rates via a white label model.
For VN8, this deal could open up much larger opportunities to work with enterprise clients previously not targeted, as well as enabling the company to expand its offering to existing business, enterprise and channel customers.
White labelling products or sale under own brand Vonex will also white-label selected CounterPath products and sell under its own brand.
To facilitate this, Vonex has made an initial order of 10,000 licenses of the CounterPath Bria softphone client suite and the CounterPath Stretto Platform which it intends to sell to its existing customer base.
Under the terms of the non-exclusive agreement, Vonex and CounterPath, who has a base of established customers, will jointly market a combined product offering to existing and potential customers of both companies, initially in the Australian market.
Highlighting the game changing nature of this development, Vonex managing director Matt Fahey said, “This agreement is a significant win-win for both parties. Vonex and CounterPath complement each other’s business in so many ways, and through joint marketing to existing and targeted customers.
“Existing CounterPath customers, who currently only access software solutions can now be offered connection to the Vonex VoIP solutions, while Vonex customers can now have access to a world class voice, video and messaging software solution.
“We will be able to offer an enhanced experience to customers of both companies, in an extremely cost-effective way.”
Of course, VN8 remains a speculative stock and investors should seek professional financial advice if considering this stock for their portfolio.
Economic benefits from collaborative engineering As well as achieving sales related cost savings, VN8 will also benefit from improved efficiencies and scalability with regard to joint marketing activities and a collaborative approach to product development and engineering.
While these activities will primarily be designed to assist CounterPath with further tailoring its products to the Australian market requirements, Vonex believes its collaboration with the CounterPath engineering division will also assist with fast-tracking the development and enhancement of its own product range, providing it with unique insights into a range of global technology developments.
Fahey said, “We will have access to one of the most experienced technical teams in the telephony/ video space, which will give us immense benefit as we tailor products and solutions for our joint marketing efforts and the development of our own product range,”
The agreement is for an initial period of one year and is able to be extended by either party to the agreement for successive additional one-year periods.
This promising development for the group has resulted in its shares trading as high as 15.5 cents on Thursday morning, up more than 10 per cent on yesterday’s closing price.
The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.
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Post by JHam on Aug 3, 2018 18:30:12 GMT
Just averaged down at $2.10.
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Post by JHam on Aug 5, 2018 18:58:45 GMT
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Post by lcd on Aug 6, 2018 2:38:48 GMT
Thanks for sharing JHam. CounterPath's marketing is impressive. In addition to this attractive case study, go through their blog where they weave introductions to their technology into short, digestible posts. As someone who has helped write blogs for my company in the past, I know consistently generating interesting blogs is a huge challenge. Great marketing in no way ensures a great product, but it shows that this isn't your typical startup. They know what they are doing.
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Post by JHam on Aug 6, 2018 13:04:44 GMT
Thanks for sharing JHam. CounterPath's marketing is impressive. In addition to this attractive case study, go through their blog where they weave introductions to their technology into short, digestible posts. As someone who has helped write blogs for my company in the past, I know consistently generating interesting blogs is a huge challenge. Great marketing in no way ensures a great product, but it shows that this isn't your typical startup. They know what they are doing. Thanks for letting me know to check out the blog. I am still trying to find the catch here. The downside. I know there has got to be one, but I haven't found it yet. No foreseeable major cash flow? The future of the Bria platform technology heading in a different direction at some point?
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Post by lcd on Aug 6, 2018 13:19:19 GMT
I think the downside is their technology is not revolutionary and it has a somewhat limited user base, so to turn a profit they really need to differentiate themselves. I doubt they can differentiate significantly on price so ease of integration seems like the big selling point. Their integration with Salesforce is huge and they really emphasize the capabilities of their APIs, like in the AT&T case study.
I will be looking to add to my position this week.
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Post by JHam on Aug 6, 2018 13:38:05 GMT
I think the downside is their technology is not revolutionary and it has a somewhat limited user base, so to turn a profit they really need to differentiate themselves. I doubt they can differentiate significantly on price so ease of integration seems like the big selling point. Their integration with Salesforce is huge and they really emphasize the capabilities of their APIs, like in the AT&T case study. I will be looking to add to my position this week. Thanks for being here to hold my hand through this
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Post by lcd on Aug 6, 2018 16:01:26 GMT
I just got a partial fill at $2.12.
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Post by JHam on Aug 6, 2018 16:04:01 GMT
I just got a partial fill at $2.12. LOL! Is that you fighting with me? I'm also stuck at a partial fill at $2.12. Very dry volume today so taking forever to fill, almost got it though. Good luck to us
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Post by JHam on Aug 7, 2018 7:29:51 GMT
It took a while but my order finally filled. How about you lcd?
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Post by JHam on Aug 8, 2018 15:50:39 GMT
I just got a partial fill at $2.12. Sudden jump to $2.30 (up 8%). I had an order in at $2.13 too
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Post by lcd on Aug 8, 2018 20:03:16 GMT
My $2.12 filled on Monday and I added a little more at $2.15 today. My average is $2.17 right now. Investing in a tech stock like this is very different from biotech because the only known catalysts are earning reports and maybe an annual conference. Since they just reported earnings, I can't tell if there will be much price movement in the next couple of months, but depending upon how the market goes for some of my loser biotech stocks (I am talking to you ADXS and ONCS), I would like to double my position in the next month or two.
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