A 45% jump in bookings is welcome news for WANdisco (WAND:AIM) shareholders. The business has had an eventful few years on AIM (read the Shares archive here) but there is a growing sense that the company is closing in on that all-important profit breakthrough.

The company has developed a platform called Fusion over which data and transactions can be instantly replicated. This is great for project collaboration for global organisations that have development teams in different parts of the world.

But, arguably, some of Fusion’s best, near-term potential uses are in more everyday situations such as financial transactions, healthcare applications or online shopping.

HOW HAS THE BUSINESS BEEN PERFORMING?

The latest trading update from WANdisco, covering the year to 31 December 2017, spells out ‘record bookings’, up 45% to $22.5m, with second half bookings alone up 28% to $12.3m.

It also highlights sales won through its increasingly influential partner network, which includes Amazon Web Services and IBM.

Net cash at the year-end stood at $27.4m, including $4m from a new growth capital facility.

MARKET IS LEFT GUESSING

Financial information is thin beyond that trading update. We’re left to wonder, for now, if the company has hit market expectations.

Consensus forecast anticipates $17.5m of revenue for 2017 and gross margins around 90%. But that’s likely to mean an earnings before interest, tax, depreciation and amortisation (EBITDA) deficit of $2.5m and a still substantial pre-tax loss of $8.5m.

The company has previously defined bookings as the total value of all contracts received in a period including both new and renewal bookings.

It is worth noting that half year results in September 2017 showed revenue as being less than the value of bookings. It will only book an amount of revenue in the accounts for the value of the work being done in the respective financial period.

The share price dipped 6% following the latest trading update to 780p, although that should be drawn against a rally from 270p-odd levels over the past 12 months.

WANdisco hasn’t said when it will publish full year results, but we believe sometime in early March is likely.

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Issue Date: 16 Jan 2018