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Actual Experience PLC Q&A: Interim Results & Vodafone evaluation (LON:ACT)

Actual Experience plc (LON:ACT) Chief Executive Officer Dave Page caught up with DirectorsTalk for an exclusive interview to discuss their interim results, new partners, the Vodafone update and what to expect in the future.

Q1: Dave, you announced your interim results on Monday and Vodafone news on Friday. If we start with the interims first, can you tell us what the key takeaways were?

A1: We’re managing cash well, the burn is coming down as the revenue increases and we expect that to continue and we have a strong balance sheet which means we’ve got a long runway ahead of us, all of which is good.

Revenue will increase as more deals come through, these will mostly be land and expand type deals like the ones we recently announced coming through from our two most active partners.

Finally, just to note, we’re really just starting to tap into our partners’ customer base and the scale that they have. In terms of expectations, don’t expect any dramatic growth of ARR, I think we’ll experience some slow growth as one or two of these deals start to come through and then the deal rate will increase over time and the ARR will accelerate over time as well.

Q2: In the interims, there seem to be talk about new partners in there?

: Yes, as you know, Actual Experience is focussed on making our current partners successful but of course, if we’re approached, it makes sense and they’re looking for the right sorts of things then of course, we’ll explore that potential with them.

We’re finding that a lot of these approaches are really coming through noise in the industry as one or two partners now are hearing about what we’re doing with our existing partners and so they’re coming towards us.

Q3: As I mentioned, Vodafone news out on Friday, what can you tell us about that?

A3: We talked about being built into products before, hardware and software products, as a key part of our strategy with the partners and as your listeners may well remember, fundamentally our strategy is being built into products and services of our partners like Intel or Arm, to be built in, to be inside.

The things we can be built inside of are for instance, large-scale outsource deals, these tend to generate a lot of revenue and they tend to go to large-scale quickly and we’ve announced one of those last year. We’re built into smaller scape services as well, they tend to roll-out over time, kind of land and expand and we’ve announced a couple of those land and expand type deals very recently.

This Vodafone news is the first public evidence, if you like, of the final part of our partner strategy falling into place which is the being built into hardware products. We’ve been evaluated successfully by Vodafone across all of their chosen uCPE platforms and for listeners who are familiar with this telco term, uCPE means universal customer premises equipment. Basically, it’s a server, it’s deployed at all customer sites by telco’s and it enables the telco to deliver a flexible range of services.

This is important to us as it enables us to tap into much more of our partners’ customer base, all the way down to smaller and smaller customers and of course, increases the revenue potential that we might have with our partners. A mature partner will probably use all three of these building types built into solutions, built into services and built into hardware.

Q4: Looking forward, what do you see now for Actual Experience plc?

A4: All the components of our strategy are coming together now so obviously we’re pleased with that. The simple focus right now, as people probably imagine, is focussed on increasing our ARR through our existing partners so very much a sales focus.

Again, it’s not a dramatic ARR growth in the short term but if we execute well, there will be compounding exponential growth as more big deal solutions come in, more land and expand come in and obviously start expanding and also if the hardware deployment model starts to factor in as well.