WANdisco - Transitioning to consumption-based model

WANdisco’s (WAND’s) FY21’s results reflect its transition from a subscription-based to a consumption-based model. As expected, revenue fell to $7.3m versus FY20’s $10.5m. As part of its transition, WAND announced two new KPIs: bookings and remaining period obligations (RPO, a forward-looking measure of revenues). In FY21, bookings grew 17% y-o-y to $11.9m, while RPO rose 92% y-o-y to $9.4m. The FY21 results were driven by multiple factors, including the general availability of LiveData Migrator (LDMA), several sizable contract wins across the globe, new business from IoT providers, the reorganisation of its sales team and strengthening of its partner ecosystem with firms such as IBM and Oracle. As we discussed in our recent note, we look for WAND to build on this momentum in bookings and RPO, and expect that its H122 results will be a greater catalyst for the stock. Consequently, we wait to revise our forecasts until the H122 trading update.