Linius Technologies expects to see revenues from business solutions in four to six weeks
Monday, 31 August 2020
Linius Technologies Limited’s (ASX:LNU) (OTCMKTS:LNNTF) business solutions, which are readily repeatable across large markets, are expected to start delivering revenue to the company in late September and early October. The core strategy of providing personalised TV solutions remains unchanged, as does the strategy of commercially validating solutions in each sector, then leveraging partners such as Amazon Web Services (AWS) and Microsoft to sell more of them. In its annual activities update, the company said in the financial year 2020, it achieved commercial validation with multiple wins in the sports sector, including clients such as SportsHero, Racing.com, Essendon FC and National Basketball League, only for them to be delayed by the COVID 19 pandemic. Partners such as AWS now see the company as commercially validated and are actively introducing Linius solutions to their clients, as Linius’ revenue growth will, in turn, generate significant new traffic for AWS. The new business wins in large markets, with the long-term revenue potential and long-trailing revenue models justify the investments and positions the company well to repeat these solutions for new clients in the quarters ahead. Linius AI Meeting Solution In April, Linius and LiveTiles Ltd (ASX:LVT) announced the integration of Linius’ technology into the LiveTiles platform. Sales activities, to primarily LiveTiles clients, have now commenced around the first iteration of the product with first revenues from this deal to be received late in September/early October 2020. Linius go-to-market strategy is to deploy, validate and repeat and its partners are actively introducing Linius into their video conferencing clients. Personalised news service New client Grafa is building its own platform, leveraging Linius Video Services APIs and is expected to deploy in September 2020 with revenue flowing within 30 days. Linius’ technology enables Grafa subscribers to personalise finance and business video content based on their interests. Linius’ sports solution Linius’ clients in the sports sector continue to deal with a great deal of uncertainty, including a lack of live sports and distressed commercial models. In addition to a number of active POC’s, Linius has deployed solutions for a number of clients and is confident that when live sports re-commence, the previously expected revenues will commence. Racing.com Racing.com continues to see growing success from Replay hub and the client is expected to continue to grow and provides a valuable case study for the power of personalised video. Further, its partners are now introducing Linius into further similar clients. Sportshero Sportshero has been deployed and ready to go live, however, the go-live date and commencement of revenue depend on the recommencement of the Indonesian football league. NBL NBL is deployed and ready to go live with the parties taking the opportunity to explore further enhancements. Further businesses A European security agency is continuing to pilot the technology in counter-terrorism related activity with live trials expected in the December quarter. The company’s previous work in anti-piracy, including a Proof of Concept with Warner Bros. has continued to develop into its Blockchain capability, with the launch of subsidiary Blockchain Video Services to develop Linius’ blockchain technology Capabilities developed during POC’s previously undertaken with universities are now being rolled out with LiveTiles. Capital raising During the year, Linius raised $6,954,434, including $1,300,000 from directors or their nominees, before costs. A further $250,000 was approved by shareholders on August 6, 2020, subsequent to year-end, and is expected to be received over the coming days. Significant cost-cutting The company has continued to maintain its cost discipline, notwithstanding the completion of four-month pay cuts from August 1, 2020. It expects its cost base will remain significantly reduced from previous quarters, until such a time that expected significant revenues begin to flow. During the year, significant investment occurred in its engineering function, with a number of fulltime resources being brought in house, resulting in a sharp drop in consultancy and software development expenses for the year, whilst increasing the output of key software deliverables and its capabilities to support clients. Linius also cut costs in March 2020, in light of the impacts of COVID-19 on its key market segments. This cost-cutting saw the board and senior management taking significant pay cuts of 20-80% of total compensation, together with the negotiation of cost reductions with key suppliers in the range of 20-50%. These all saw a fall in cash outflows for the June 2020 quarter of $1,058,000, compared to $2,665,000 in the June 2019 quarter. Investor webinar The company will hold an investor webinar in the coming weeks to update the market on LiveTiles sales, deployment of the Grafa and NBL services and pipeline opportunities.