FYJun23 results are in line and confirm a very strong year: sales +18% y/y (recurring +32%, now 72%/sales), while ACV is up strongly too: +15% y/y (or 20% u/l) driven by a noticeable uptick in new biz and also 122% NRR. All these metrics scream ‘quality business, doing well’and so given this, a c.7% FCF yield doesn’t stack up. We sense that the market is either hung up on NET’s contract renegotiation and/or market risks. This note address both these points and how these concerns are over-done and/or inaccurate. There’s an exciting and quality business here.
