IDEAS: Recurring revenues are building as big banks and big companies subscribe
to Boardwalktech Software’s (TSXV: BWLK) Digital Ledger technology for
this small cap value investing blog took a bit of a flyer when we first
recommended Boardwalktech Software and appointed the Company’s stock to
Investorfile’s list of Top Ideas just over two years ago (See: Boardwalktech
Software offers a growth investment opportunity in digital data management at a
value stock price). At that time, the Company was in a net debt financial
position but with good business prospects. Today, Boardwalktech is debt-free
and the business prospects are converting into recurring revenue streams as its
Digital Ledger technology Software-as a-Service (SaaS) subscription sales gain
California, Boardwalktech Software Corp. (TSXV: BWLK – C$0.83) has developed a
unique and patented Digital Ledger database technology, which the Company says
is designed specifically for collaborative, multi-party enterprise
applications. The Company says this Digital Ledger technology creates a
single version of truth for all enterprise information by unifying unstructured
and structured data for faster and more insightful decisions. The
Company’s customers include Fortune 500 Companies in CPG; High Tech; Financial
Services; Manufacturing and Retail, among many other sectors.
Boardwalktech’s revenue is generated from two primary sources: software
subscription to its core Boardwalk Unity Digital Ledger Platform and
Big companies today are subscribing to Boardwalk Unity Digital Ledger
Platform to resolve key enterprise business problems by connecting multiple
users in the enterprise value chain. This is to improve planning and results
with the alignment of data from various/multiple enterprise systems of records
used in the information exchange processes. As such, multiple users can secure
simultaneous access to the same data in a relational database environment,
which supports concurrent access to record objects while being edited. The
Boardwalk Unity Digital Ledger Platform is a complete enterprise platform that
resolves trust and collaboration issues that large companies face when working
with multiple parties. This enables customers to automate manual business
processes and then turn "digital” to run mission-critical applications managing
the digital exchange of information internally and with customers, channels and
suppliers. It also allows for chaining of transactions in a database to support
decentralization, provenance and immutable versioning, security and transparency and change management/change
history for verification of data
without having to be dependent upon third-parties.
After slower than expected uptake, new subscriptions for Boardwalk Unity
Digital Ledger Platform are now building nicely. This past spring, the
Company announced it had signed a long-term
contract with one of the world's largest banking and financial services
companies based in New York. This
major Bank customer plans to deploy the software technology across its global
enterprise with a focus on compliance, risk, data management and business
process improvement. Boardwalktech says the net proceeds from this contract are
expected to exceed US$4-million over the first three years and should increase
in subsequent years as this platform is adopted and deployed globally across
the client's banking and financial services business units. Last month
Boardwalktech reported it has expanded its software license and services
contract with one of the top accounting and consulting firms in the
world, which adds to the Company’s annual recurring revenue by an additional
US$500,000 with this existing customer.
Fiscal 2022 earnings report, Management said that due
to the increase of new recurring revenue contracts, for the first time, the Company
will be providing guidance on a go forward basis as the predictability of business
has improved. As such, the Company projects revenue for the upcoming
fiscal year in 2023 to be US$6.5-million to US$7.0-million, which implies a
more than 50% increase from the total revenues generated the prior fiscal year.
Almost all of the growth will come in the form of Annual Recurring Revenues
(AAR). This revenue guidance is based on existing contracts within the
Company’s control to date and excludes potential contracts in the pipeline and
add-on professional services, which could lead to more sales and maybe revised
revenue guidance upward for the current fiscal year. It is also important to note
that Management believes the Company has sufficient funds to achieve its guidance or upside growth, while reaching
profitability in Fiscal 2023.
Last week Boardwalktech released Fiscal 2023 Q1 results which reflect some of
recent business momentum. The Company reported revenues for Q1 was US$1.51 million, up 48% from the prior year and a 26%
sequential increase from what was reported in last quarter. Also cash inflow
from operations was US$0.9 million. The Company had
a cash balance of US $1.7 million and no debt as of
June 30, 2022.
Investorfile first recommended Boardwalktech Software, the stock has generated
a high-point return of 164%, based on its highest closing stock price of C$1.37.
Subsequently, the share price has retreated like most small cap tech
stocks in the bear market of 2022 and last traded at C$0.83. The current share
price still represents 60% upside from the day we initiated coverage ofthis
stock in our blog.
recent developments, we feel strongly that the Boardwalktech Software story is
starting to prove itself. The Investorfile blog still
thinks that the Boardwalktech’s Digital Ledger technology is one of the
most compelling software stories in the small cap market today. The Company’s recent
financial results are beginning to reflect this.
Boardwalktech Software Corp. has
approximately 44.3 million shares outstanding.
Company’s website: www.boardwalktech.com
Author Ownership Disclosure: TSXV: BLWK – Yes
Investorfile's share price
accumulation target of $0.75 for Boardwalktech
Software Corp. was initially reached on
January 5th, 2021.
This article is for informational purposes only. This article is based on the
author's independent analysis and judgment and does not guarantee the
information's accuracy or completeness. The information contained in this article
is subject to change without notice, and the author assumes no responsibility
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within this article should not be construed as offering of investment advice.
Those seeking direct investment advice, should consult a qualified, registered,
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Investorfile.com is not engaged in an investor relations agreement with Boardwalktech Software Corp. nor has it
received any compensation from Boardwalktech
Software Corp. for the preparation or distribution of this article.
The author of this article has acquired and may trade shares of Boardwalktech Software Corp. through open
market transactions and for investment purposes only.