Do you recall the days when getting a new SIM card was a crucial part of our travel adventures? It was a common sight to see travellers desperately searching for a SIM card kiosk upon arriving in a new country, all in an effort to stay connected without facing those dreaded roaming charges.
However, in recent times, this scene has undergone a transformation as the telco industry welcomes the rise of embedded SIM (eSIM) technology. It’s an innovation that eliminates the need for traditional physical SIM cards, allowing users to seamlessly switch between carriers or plans through digital activation.
eSIM companies like Flexiroam (ASX: FRX) are at the forefront of this trend, inching closer to approaching their long-forecasted milestones. Flexiroam is optimistic about achieving positive cash flow by January 2024 driven by substantial growth across all facets of its operations.
Flexiroam CEO Marc Barnett is offering an unsecured loan of $400,000 to the company for a year starting from 29 September 2023, at an annual interest rate of 10%. This loan doesn’t come with the option to convert it into shares. The Company can choose to repay the loan early or extend it for another 6 months. While there’s no immediate need for these funds in operations, the Board considers it a wise move to have this extra capacity due to ongoing opportunities.
These additional funds are believed to provide further confidence to shareholders that Flexiroam will not require a capital raise to achieve its cash flow positive event. Having this additional cash available will ensure the Company can maintain a monthly cash balance of at least $1 million in the lead up to achieving its cash flow positive milestone.
“We delivered on our budgeted outcomes in FY23 and in the interim FY (April-June 2023). In these periods Flexiroam demonstrated strong revenue and margin momentum, following the transformational changes we have made across the business.”, commented Barnett.
“Flexiroam is now set up for a strong FY24 with the Company further enhancing our infrastructure, products, and services. We continue to establish strong partnerships, lower our data costs and are investing heavily in R&D to support future growth. All of this will enable us to grow the Company to serve billions of devices worldwide.”
Barnett highlighted that another key aspect of Flexiroam’s future plans is to achieve positive cash flow by January 2024. The company has made significant investments in its core technology systems over the past two years, creating scalable platforms to accommodate growth. However, the growth catalyst would be the Company’s significant appeal in the Travel sector.
According to Juniper Research, global eSIM adoption is expected to reach 3.4 billion connections by 2025, fueled by the increasing popularity of eSIM-enabled consumer devices and M2M applications. eSIM is now used in phones, tablets, smartwatches, and IoT gadgets, offering easy carrier switching, simple setup, and global connectivity.
Traditionally, provisioning a new mobile service involved physical SIM cards and manual activation. eSIM streamlines this process by enabling remote provisioning and subscription management over-the-air (OTA), eliminating the need for physical cards and reducing logistical complexities. This boosts operational efficiency, cuts costs, enables swift service activation for users, and caters to the expanding Internet of Things (IoT) and Machine-to-Machine (M2M) ecosystem.
Established in 2011, Flexiroam initially addressed the mobile data needs of travellers seeking cost-effective and global connectivity. Over time, the Company has expanded its scope beyond consumer travel to include IoT and Enterprise Solutions. Flexiroam’s extensive network now covers 520 network operators in more than 200 countries and territories.
For the full year ending 31 March 2023, Flexiroam disclosed revenue of $8.9m, a notable uptick from the $3.6m recorded in the prior year. While there was an increase in the cost of sales, rising from $2.1m in FY22 to $5.04m in FY23, the substantial revenue growth allowed the company to reduce its Net Loss After Tax (NLAT) from $4.1 million in FY22 to $2.6 million in FY23.
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