How Verkada Is Unprofitable But Generates Positive Cash Flow

By John Honovich, Published Sep 30, 2022, 07:46am EDT (Research)

* ******* ******** ******** ******* **** Verkada ** ********** ******** **** **** yet *** ******* ** ****** ************. The ****** *** **** ** *** revenue ** ********* *** *** *** Verkada ** ********** ******** *****-**** ***-********.

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**** ** ** ********* *********** ********* for *** *******, ***** ***** *** traditional ******** *** ******* ************* ** security, *** ****** **** ** ** far **** **********.

** **** ****, ** ******* *** this ***** *** *** **** ** such ** ********* *** *******.

Conventional **** *** ***

************** **** ********* *** ***** ******** RMR ** ********* ******* ** * monthly *****. *** *******, ***** ***, on * ******* ***** ** *************** **$*.** *** ***** *** ****. *** Pro ********** ** *************** **$**.** *** *****.

***** ********* *** * ******** ***** and, **** ****, ********* **** *** churn, *** ********* *** ******** ******** or ********* ** *******. *******, ** front, **'* **** ****** ****.

*****, ***** ********* ****** *** ** other ********* ******* ** **** ** invest / **** ***** **** ***** new ********. *** *******, ***** ***** no ******** ***** *** ********* ******** the ******** *** ************ **** "$* down" ******* *** ******* **** ****** hundreds ** ******* ** ***** *******.

Verkada - **** ******** + ************ ***-*******

** ******* **** **** *** ** Eagle *** ** *****, **** ***** just *** ~$** *** ***** ***** (i.e., */**** ** *** $*** **** software ******* *** ** ******** *******).

*** ******* ***** ** *** ********. Every **** ******** *** ******** ** their ******** *** ***** **** **** only ******** * *-**** ************ ******* to *****, ******* ********* ***** * to **-**** ******** ** *** **** time.

***** ******* ** ******** ***** *** very ****, ** ******** **%+, **** after ********* ** *** ********** **** of *** ******* *******, ** *** example ***** **********:

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******* ******* *** *********, **** ******** to *******-****** ********* **** ** **** and *****.

Benefits ************ ***-*******

*** **** *** ** *******'* **** flow ** *** ******** ************ ***-********. Rather **** *** ********* ** ** a ******* ******* ****, **** **** subscription ******** **** ** *** ************ perpetual ******* ********, ****** **** ** some ***** ** ******* *** **** you **** ** *** **** ** brick ***'* *******.

** ******** **** ********* **** **** by **% *** ******* ****** ******* monthly ** * ****** ****. *** example, *** ****** ***** ** **** at ~$*** *** ******* ** ******* 3-year ************ **-***** *** **** **** another $***+. ***** ***** *** ***** option, ** ** ** ** $*,*** MSRP ($*** *** * *****).

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****** *******'* **** ******* ****.

***** ** ******** *** ******* ******** pre-pays * *****, * *** **** 10-year ******** *** ***********. *** *******, see******* $*+ ******* ****-**** *** ***** North ******** ****** ****** ********. ** ****, ******* **** ***** $2 ******* ** ******** *** **** $4 ******* ** ***-**** **-**** *************.

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Cash **** ******

*** **** **** ******* ** *******. While ******* *** **** ****** **** revenue ** *** ******** **** **** and *** ******** **** ********, **** still *** *** **** *** ** front. ******** ** *************, ** * customer **** ~$*,*** *** * **-**** license, ******* *** **** ****** * tiny ******** ** **** ** ******* in *** ******* **** *** ** still *** *** **** ** *** money ** *** ****.

$100+ ******* ** ***-********

******* *** ******** $***+ ******* ** pre-payments, **** ** *** ************** ******* they **** **** **** ~***,*** ******* at ** ******* *-**** *******.

**** ** * ******** ****** ** money **** ********* ** ***** ** Verkada ***** *** *****.

Not **** *****

*********** *** *** **** ***** *** they *** *********** * **** ******** loan. **********, ******* **** ***** ******** to ******* ***** ******** ** ***** 2 ******* *, *, ** **. Plus, *** **** ********* ** *******, pre-payments *** **** ********** *** **** a ******* **** ** **** ****** costs ** ********** *** ******* ** years ** ****.

** **********, *** ****-**** **** ** the **** ** ********* ****** *****, given *******'* **-**** ********. ** ** when * *********** ********** ** ******* fail, *.*., **** ******* *******, ******* may ****** ******** ****** ** ***** those *****.

Powers ******

*** ***, ******, ******* *** **** money ******* (*** ******** ************ ****** from ******** ***** *** **** ***** of ******** ******** ** *****), ******* Verkada ** **** ** ***** ************* less ******* *** ***** ************* **** on ***** *** *********.

Sales ***** *** *********

******* ** ****** ******** ** ** 100% ** *** ****** ******* ** sales ********, ******** ** *** ******* metrics ** ***** **-****** ******* ****** startup / ****** *********.

******* ***** ** ******** $***+ ******* or **** ** ***** *** ********* expenses **** ****. *** ******* ***** nearly *** ***** ********* *** ******* 70 ********* **** ** ********, ** ~$300,000 *** ********, ****'* $***+ ******* a ****. ****: *** ~$***,*** ******* not **** ***** ******** ************ (*********** *********** **** $* ******* * year) *** **** *** *** ******** costs ** ******* (******* *** * ***), *******, ****** ********, *****, **** cards, ***.

** *******, ***** ***** *** * valuable ********** ** ******** *** ******-** customer ****, *** *** ******* ** do ** ** ************* ******** ** the ********** **** **** **** ******** from ************ ***-********.

************

******* ** ************ **** ********* *** sales *** ********* *****, *** ******** costs, *** *** **** ** *** organization (******* ~*** ********* ******* ** sales *** *********).

*******, **** ** *** * ******* for ******* ****** ****** *********, *** arguably **** **** ** *** ******* given **** ** ******* *** *** these ***-********.

** ******, ******* *** ***** *****, e.g.,*** ******** *** ********* *** **** ******* ******. *** point ** **** **** ** *** to ******* ***** *** ** ******* context ** *** ********* ********.

Solving *** *** *****

****** *** *** ********* ********, ******* shows *** *** *** ***** *** be ******. *** ********* *** ******** security ********* ** **** ******* ****** nor *********** *** ********* **** ** selling ******* *************. *********** *** ****** because *********** ** ***** *** ***** while ******* ****** *** ***** ***** they *** *** **** **** ** front.

** ******* *****-**** ************ ******** ** front, ******* ******* *** **** ******* buying ******* ** ******* "**********" ** front (*.*., ************** ****** ** *** or * ********* *** *******). ****** find **** **** ******* *** *******, like ******* *** **** *** **** cash ******* *** *** **** ********** that **** ** ***** ********* **** come **** *** *** **** **** more ** *, *, ** ** years *** ***** **** *******.

Comments (15)

****, *****'* * **** ** *** title. "*************"

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*****. ***** ***.

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****, *** **** ********* ** *******, pre-payments *** **** ********** *** **** a ******* **** ** **** ****** costs ** ********** *** ******* ** years ** ****.

**** ******* ******* *********, *** **** will ** **** **** ** ******* the ******* ** ********** *****, *** the ****** ***** ** **** ****** year's ********* ******* **** **** ** lower.

** *** ****** $**** *** * 10 **** *******, **** **** ***** be ** **** $***.

*** $*** ** *****, ****, *** years **** *** **** **** *** less ***** **** $*** ***** **** - *****, ** *** *********, *** costs ** ******* ***** ******* ******** will **** ****.

Agree: 1
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*** $*** ** *****, ****, *** years **** *** **** **** *** less ***** **** $*** ***** ****

** ** *** ******** *** ******** for *******. **** *** *** ***** up ***** ** **** *** ****** it, *.*. ** ********** *** ******** a ******* ****** **** *** ***** (if **** *******, ***.)

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**** *** *** ***** ** ***** so **** *** ****** **, *.*. in ********** *** ******** * ******* return **** *** ***** (** **** succeed, ***.)

** **** *** *** ***** ****** due ** ********** *** **** ** use ***** ***** ** '****** ** themselves' ** **** ***** ***** *** the ******* ********* ****.

** **** ******, ***** ******* ******** - ***** **** ********* * ********* benefit - ***** ** *** ****** that ***** **** ** *** ****** of *** ****.

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** ** *** ** * *** prepayments ***** ********* **** ***** **** down. **** ***** ******** ** **** point *** ****** *** ***** ** front ****** **** ****** ** **** for ** ** *******.

Agree
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Funny

*** ** *** ***** ******* ** the **** *** ******* ****-****, ******* contracts?

** **** *** **** * ***** strategy, *** **** ****** **** ** doing ** **** ***?

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Funny

******* ** *** *** **** *** doing ****.

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******* ** *** ****** **** *** focusing ** ******* *****-**** ************ ******** is ******** ** *****.

Agree: 1
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Funny

****** *** **** *** *** *** only ****. *** *** ******* **** the **** ***** ** ****** ******** years *******.

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*** *** *** ***** ******* ***** are **** * ***, *** ******* norm ** ***** ******* ** ******, putting ***** ********* ** * ************.

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**********, * **** **** ***** ****** vs *******/********* ** ****** *******.

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* ***** **** *********** *** ****** would ****** ** ** ****. *** end ***** *** **** *********** **** flow *********** *** ****** ******* *** most ***** ************* *** ****** ********, I *****, ***** **** *****-**** ** front *******.

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**** ******* ************* **** ** **** bureaucracy ** **** ** ****. ***** all *** ********** ***** *** ** to ****** ******** ********* ** * buying ********, ***** *** ** *** up-front *** ** *** **** ******** for *** ******* *****. ******* ********* once *** $* ** ****** **** asking *** $* **** *****, **** if $*** ** **** *** *** same *******.

********** ***** ** ******* ** ******* those **** *** **** **** ***-**** huge **-***** **** ** *** **** want ** ** ********. (****** ****'** probably ***** ** ******* **** ****** of ******* ****** **** **** ****-***** skill.)

***** *** ** ** **** ************* that *** **** **** ********* ***** if **** *** **** ** ** "no-decision" *********** *****. ****** ***, *** key ** **** ****** ** *** internal *************.

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Informative: 1
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******* ***** **** *** **** **** one-time **** **-***** **** ** *** they **** ** ** ********

* ***** ***** *** * *** of ************* **** **** ** ** that, *.*., *********** ******** ****** *** "always" *** ** ***** ** ******* that **** *** ****** **** **** need ** ***** ** ****.

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