Source: Craneware.com
Overview
Founded in 1999 with headquarters in Scotland, Craneware is the leader in automated value cycle solutions that help US provider organizations discover, convert and optimize assets to achieve best clinical outcomes and financial performance. Simply put, Craneware provides software technology to enable healthcare providers to improve margins and enhance patient outcomes.
Although the stock is accessible through OTC tickers OTCPK:CRWRF and CRWRY, investors are strongly recommended to buy (wherever conditions permit and for better liquidity) through the primarily-listed ticker CRW on the London Stock Exchange.
Bond Proxy
Craneware generates most of its incomes through software subscription and professional services engagement, both of which are highly recurring. Management employs a prudent approach when it comes to revenue recognition, as their annual report described the following:
Under the Group’s ‘Annuity SaaS’ business model we recognize software license revenue and any minimum payments due from our ‘other route to market’ contracts evenly over the life of the underlying signed contracts.
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As well as the incremental license revenues we generate from each new sale, we normally expect to deliver an associated professional services engagement to assist our customers in embedding the software within their core processes to maximize the value the software can bring to them. This revenue is typically separately identifiable from the license and is recognized as we deliver the service to the customer, usually on a percentage of completion basis.
The typical length of a contract is five years and the recent renewal rate has been consistently over 100% by dollar value (along with additional sales), which is quite impressive.
Such an annuity type of business can often be regarded as the "bond proxy" thanks to their reliable and predictable income streams for investors. In the tech world, bond proxy stocks can be often found among companies selling products and
