Ladies and gentlemen, i can only say one thing: i'm just kidding we're not gon na anyways what a crazy ride we had yesterday, but first i got ta say good morning to the daily allegedly squad. I've been seeing your comments watching daily. Thank you so much. My name is tom: i'm your friendly former senior financial analyst, currently a full-time youtuber, and in today's video i want to give you a little bit of a deeper dive into some of the issues we did not get to cover yesterday.

So here's the thing you know, i don't want you to click, nothing. I don't want you to smash nothing. I don't want you to buy unsubscribe. Just give me your attention because i'm about to talk about important stuff now i don't hold you hostage.

So here are the topics in advance and i'm going to give you the bottom line as well. So, first of all, i will explain with the numerical example why alex carp is selling the whole insider selling narrative of alex carp. I'm gon na go through an entire numerical example, showing you why he has no choice but to sell shares right now, even though he doesn't want to, and once i do that example with you step by step within 30 seconds, you'll see because i explained it yesterday, But i feel it was very amorphic. It was very intangible, so to speak right, i'm going to give you a numerical example to show you how the mechanics work that actually force him to sail.

It's quite easy to see when you put in numbers. The other thing i feel we didn't get to cover yesterday is the quality of the financial results and the business results we're going to go through the presentation and i'm going to show you everything they've done this quarter, which is nothing short of phenomenal. Now, in my video yesterday, i said they hit expectations because, frankly, expectations were very high, but that doesn't mean that what they did was not remarkable. If you look at their numbers deeply like we're going to do in this video by the way, i'm not sure deeply is an actual word, but as a russian, i get to get away with that.

If you go deep dive into the numbers, you're going to see that they're on the phenomenal path and that i think, was the contributing factor to the massive upswing we had yesterday, because a lot of these retail investors basically said. Oh damn, the stock is actually performing. Well, wow look at these numbers, so i think that we deserve a deeper dive into the actual numbers. The growth numbers, the financials, so if you're into planet here - and you want a little bit of a deeper dive - that's probably a better video for you today.

Instead of just the actual numbers, we all kind of know in here, more analytical and here's another piece of news which is kind of interesting. While i was buying the dip and come to think of it, i should have used kathy wood in my thumbnail. She was actually buying the dip as well. I bought about 10 percent, more of valentine to increase my holding.

I mean i love that company. She loves it even more yesterday between rk and rw. She bought 2.8 million shares just yesterday, so i was buying my little 10. She was going all in mother lover.

I mean that was crazy, nothing more. To say about that. I mean we know she loves the company. It seems like it's becoming slowly.

One of her high conviction stocks. She said that once things go a little bit wide and the tech sector will call off she'll be consolidating. It seems that she's, basically consolidating into tesla patentee and a few other companies, which is quite interesting but doesn't really justify a whole video uh, let alone the whole thumbnail about that. So we're gon na keep it professional, no clickbait kathy today so check this out.

So, first of all, the numerical example of why alex carp absolutely has to sell his stock check this out. So whenever you have a professional, ceo or somebody, you want to retain the company, it's very customary, to give them a package, not that kind of package get your head out of the gutter package of options. Essentially every quarter, you have a certain amount. That's awarded to you and, as the price of the stock of the company keeps going up, that option is actually worth more now, as the stock keeps going up.

The original price at which he got the options. Let's say 100 price per share is now differentiated versus the market price. Let's say 200 per share, so he has that benefit built in and at this point you might say well that's a benefit. He has a built-in discount to buy shares at less than the market price phenomenal.

Well, not exactly because every esop grant is up meaning employing stock options. Essentially, you have an expiration date. They come with strings attached. You got ta exercise by a certain date.

Otherwise, these options will expire. That's very normal. However, when you get to the expiration date, you have a decision to make, because you have to pay a hundred dollars to exercise that, based on our example right but wait, there's more. You got ta pay tax.

Now, when you have a 200 price per share and the actual exercise price is a hundred, you already have a hundred dollars built in as taxable income. Essentially, that is capital gains, and if the long-term capital gains rate in the u.s is 20, which it is, then you have another 20 to pay and here's the case. You just spent a hundred dollars per share, including the 20 for tax and another 100 to exercise these options, since you don't have a choice since they're about to expire, but you got zero dollars coming in so no money to actually pay for this. So you got ta sell shares just to pay for these option grants and that's unfortunately, for the palantir shorts and the haters.

That's the sole reason alex carr has been selling shares. However, if you take a look at the sales numbers he's still holding about 80 to 90 percent of the shares, he didn't really sell off, neither did peter thiel, i mean that's just nonsense. So in general the whole narrative of insider selling is now completely debunked. After the q1 call and absolutely love that now, let's go over the presentation because there's a lot to cover there.

But the first thing i want to show you here, which is quite interesting - is the adjusted operating income. The company had adjusted operating income of 116 million in q1 2021 and if you compare that to the number they had in the entire 2020 year, they already reached 61 of the entire net income of last year in a single quarter. Now these numbers, when you give them that context, mean a lot because 116 is just a number right, but when you did 190 through the entire year last year you ready 116 and one quarter. That means a lot and again in these videos.

I don't want to just read off the page. I want to give you extra context, so you actually get the full picture, not just these numbers so check this out now. First of all, this number in itself is quite impressive: 44 adjusted free cash flow margin. That is wild.

However, that's even more interesting look at the path they went through, so they lost 300 million in cash flow in q1 2020. However, they made 151 this quarter. That means they've shifted from losing 300 million in cash burn rate right from the first quarter of last year. They went from losing cash losing burning, whatever you want to call it 300 million per quarter last year in q1, 2020 to making 150 per quarter positive.

As far as cash flow that happened in a single year and honestly, i can think of a lot of companies that can make this happen going from negative 300 to positive 151 quarter over quarter year, a year that is tesla level numbers or tesla level improvement. Whatever you want to call it not saying that this is tesla, i'm saying this is hell impressive. Now this number everybody expected their revenues, grew by 50 versus q1 2020. Now, because it was kind of anticipated, people tend to overlook how impressive that is.

You got 50 growth in revenue quarter or quarter year over year, which is nothing to be ashamed of. That number is phenomenal from 230 to 340, not to mention that they actually beat the expectations by about 10 million, but that's a really impressive growth, but wait. There's more now, this slide is impressive on many levels. First of all, most companies won't share this data because it's too complex, but they actually did beyond the fact that this number is insane, so their billings per quarter grew from 104 to 362..

Now, just when you think that billings is some sort of a technical thing, it's not getting people to pay you what they owe. You is not that easy. It takes a lot of work and it actually shows a lot about the quality of customers you're working with. If you're able to increase your billings from 104 to 362 year-over-year quarter or quarter, that means that a you know how to do your job as far as billing number two that your clientele is triple a the only way to get this amount of growth in billing Is by having phenomenal clients and a really good team? That means a lot to me, even though a lot of people will overlook this number now.

This number is not that impressive. To me, i know a lot of people will say: well, that's 81. Year-Over-Year growth in the u.s revenue - that's fine, but you have a lot of concentration here. That means that if you grew 49 globally in 81 percent of the us, that means that the u.s is essentially where you powerhouse is i'd like to see this company go global, and that means that this high number is actually a sign that they're not there.

Yet not saying that they won't be yes, you know me, i'm a huge bull, but i'm saying 81, when the entire growth is 49. That means you have a lot of work to do internationally and that's fine. I think they're definitely on the path, but i'm not going to be sitting here and you know just licking their bum, because i, like the company, i'm going to be pointing out the things that i don't like and 81 given that 49 is the entire global row That means that this number is way too high for my taste. It definitely needs to be spread around more evenly.

Now this slide as impressive as it is. It's nothing to write home about, because a we anticipated that and b. We know that they're very strong with governments we're looking at the commercial side. This thing not surprising, they're, probably going to do the same percentage next year and next quarter, they're very good with governments, especially with the us government.

So that part we got it covered. That's the basis we want to see the growth in the commercial actually hit these numbers to 76 to 80. That's still not there. Yet.

This is actually also very interesting. That's the backlog. Essentially, they have 5.4 billion in total remaining deal value. That means that's cash flow.

They're going to collect on the next few years on project they still haven't collected on. That means a lot as far as their growth. Imagine having a business that actually gives you 5.4 billion of bill flow when your entire revenue for q1 was 340 million. Imagine how massive their future is.

This is insane now. This is where i want to see more improvement: total commercial growth 20, which is very nice, but nothing, i would say, wow, that's amazing. We want to see higher growth here. This is the commercial customers.

So 19 - that's very nice, but look at this 72 percent came from u.s commercial customers. We got to see more global, we got to see more commercial and we got to see a better spread, not just 150 customers. We got to see this thing, go scalable! That's the main stepping stone these guys have to go through. So for me, that number is nice, but nothing outrageous.

This thing, even though it looks great, i think it's a sign of weakness, because it essentially says that the top 20 customers are generating 34 more. That means high dependency in your biggest 20 customers, which is something i don't want to see. I definitely want to see revenue per customer go up, but i don't want to see the company become so heavily dependent in the top 20 customers. Because again, that makes it look more like a consultancy and not as a scalable business, which i'm sure it's not i'm sure it's a scalable business, but these numbers are definitely something they need to work on now.

This is wow. Now, if you want to talk about wow moments, this is it 83 adjusted gross margin, contribution margin equally as impressive with 60. By the way contribution margin is essentially also when you take out the variables. So all the variable costs come down still 60 margin.

Wow. That's very impressive, so there you have it, ladies and gentlemen, nothing fanboyish! I told you the good. I told you the bad way they need to improve where they were really impressive and, in general my total impression, based on that, as always a huge thanks for our channel members and our patrons. Thank you so much.

I really appreciate your support. We'll see you guys in the next video.