Intouch Insight Ltd (INXSF)

[littlefish]

This is a bit weaker guidance (on low end) and hints at flattish sequential revenues going thru rest of year (approx $2.7-$3 mill per Q for Q2-Q4):

"Based on the opportunities before the Company, Management anticipates year-over -year revenue growth. Q2 2012
revenues are currently forecasted to exceed $2.7 million, which represents a 60% increase over Q2 2011, and the
Company continues to forecast total 2012 revenues in the range of $11-11.5 million with a target of 25% growth over
2011."

But company has a track record of being conservative. Maybe they saw an acquisition possibility earlier that isn't there now or something so guided toward lower end. Not sure.

On the plus side, they affirmed looking for 55-60% margins for Q3 and mentioned looking to be done with SI transition by end Q2 which is coming up fast so probably close to a known instead of guesswork.

Looked like COGS on IMS was heavy in Q1 and partially responsible for the lower margins along with the elevated costs from continued migration/transition of SI customers too.

The 55-60% Q3 GM guidance helps show that Q1 is probably a bit of GM aberration along with maybe some seasonal weakness.