Wyld Networks - Long-awaited delivery started - Mangold Insight Analysis

Virtual satellite network operator Wyld Networks ("Wyld") has started to deliver modules which will generate significant cash flows moving forward.  The order book of SEK 91.5 million is starting to be converted into revenue which is a huge step forward for Wyld. Mangold believes that the most relevant aspect is how quickly Wyld can deliver the pre-ordered modules and terminals.  In the second quarter, revenue was lower than expected while costs developed at an expected rate. An agreement with SpaceX on possible areas of collaboration further demonstrate the potential of Wyld's offer. 

The company is estimated to be well capitalized to reach profitability (EBIT) in 2024. Wyld had about SEK 19 million in cash by the end of the quarter and received R&D grant of SEK 6.3 million in August from the UK government. Moreover, Wyld did a directed issue of shares of SEK 15 million, took a loan of SEK 15 million and issued free-of-charge warrants of series TO4 and TO5. The warrants can at most generate SEK 89,2 million with a total dilution of 33,8 percent. 

Mangold has lowered revenue estimates for 2023 and 2024 but increased it in the longer term. The reason is that data revenues are expected to scale at a faster pace than previous estimated. Mangold still believes  that the company is undervalued but lowers the price target to SEK 18,00 (27,00) per share over 12 months. In order to meet the price target, Wyld needs to deliver in significant volume in the fourth quarter of 2023 and become profitable (EBIT) on a full-year basis in 2024. Mangold assumes full dilution in the valuation. 
 

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