mCloud Technologies Corp (MCLD)

[DVP25]

Initialization Revenue:

I think the issue of Initialization Revenue (IR) needs a little more attn in regard to any profitability or cash flow analysis, as I'm not certain I fully understand the accounting.

My understanding is that approx 20% of the Total Contract Value (TCV) is booked as IR at the time the asset is connected, but no cash is collected up front (booked as a Receivable). This would mean that the "over-time" revenue booked each Qtr is actually only 80% of the cash being generated from the connected asset base.

Do I have this right? If so, as the connected asset pace begins to ramp each Qtr, it should result in bottom line growth outpacing cash flow generation.

It's very possible I have something wrong here. Any thoughts?