HDP Q2 results

Revenue $61.8, 42% y-o-y growth
Gross profit $41.3
gross margin 67% up from 59% y-o-y

Sales $50, R&D 27.5 G&A $17.8, Loss from operations $54.4

deferred revenue $216M, $72 m cash and equivalents, increased their guidance for the next Qtr and full year.

The stock is up in AH (7%) to $13.65.

The margin growth, narrowing of loss are all good. If they can manage to double their current revenue and sustain the gross margin @65% the stock is of value. How much dilution we are looking between now and then, and will sga (sales and G&D) stabilize to the level of software industry standards?

I am sure between now and the above state, the stock will offer opportunity to buy. But not buying now.

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Up nearly 20% today

SGA is currently 100% of the revenue, if you compare this with UBNT, which is < 5%, you can understand why analysts as a whole are skeptical of UBNT’s model.

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