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hey everyone palente here gave us some great insights into how development of its AIP boot camps are going also the revenue that it's driving from those products I'll also reveal what I think about palen's latest strategy decisions I'll discuss its profitability growth over the last several years and I'll update you on my recommendation for paler stock if you are already aware I made a big change in my paler stock recommendation recently and I'll share with you what that was in this video as well so let's dive into palente here saying that Revenue increased by 21% to 634 million in the most recent quarter and that was driven by the momentum of AIP and their continued strong performance in the US commercial that was music to my ears that's what I had been looking for from paler is greater expansion in its us Commercial Business and Commercial Business overall because that's where I felt paler opportunity set is the greatest sure it's wonderful that it's gaining traction with governments worldwide but there's a limit to how much it can grow with governments because there's a limited amount of governments worldwide and so there's a smaller ceiling in that segment whereas there's millions and millions of businesses in the world and palente here continue serving those businesses and really not reach the ceiling of that performance given how small paler is right now relative to the overall business segment the Enterprise spending segment so I was happy to see palente here make progress on this front and paler management saying that interest in its AIP is loud and clear not only is it suceeding but it is accelerating boy that's better than I was expecting not only is it succeeding but it's accelerating meaning the rate of growth is increasing so I really like what I saw from palente here in the latest quarter in terms of Revenue growth and paler has over the longer term done a great job keeping costs under control let me share with you palen here's operating profit margin in the trailing 12- Monon period you can see how after B in out in late 2020 at negative 120% pener really started to focus on cost management and since then it's made dramatic improvements and it's profitable on the bottom line now for several now has risen to 5.39% so great progress on that front as well so not only has it implemented this new product category this new service that's driving accelerated demand it's it's done so while keeping costs under control so that's what makes it really impressive for me not only delivering an Innovative product or service that's generating strong demand but doing so at reasonable costs that's really where I like to see businesses operate that's the name of the game right anybody can deliver an excellent product or service if you're willing to accept massive losses on the bottom line right I can develop a product that cost me $100 million to create and then sell it to you for $1 million you will love it right because you'll feel like you're getting such great value but that would lead to massive losses for me and that's not sustainable there's a lot of businesses like there out like that out there today right that doesn't impress me I don't invest in companies like that I want to see companies deliver great products at reasonable cost and generate difference between what they sell that product and what it cost them to make that product that leaves a profit for investors that's what investors are interested in and so on the back of these results I upgraded paler stock I placed it on a borderline buy I had gosh paler stock is one that I've changed my recommendation on so often more often than usual because the stock price is so volatile it moves so much so quickly that I need to change my recommendation because the valuation fluctuates right I'm not willing to pay an unlimited price for a good business paler I acknowledge is a good to great business but I'm not willing to pay excuse me I'm not willing to pay an unlimited price so when the price increased in I want to say late uh March I told investors it was a good time to take profits so I recommended paler stock I downgraded it back down to a hold right but after the latest earnings results came out and I saw progress on these several initiatives and the paler stock price came down by roughly 15% following the earnings results the combination of those factors led me to upgrade paler stock again so now I have it on a borderline buy not clean buy not just yet because of the valuation it's still trading at an expensive that I feel a valuation that I feel is a little too expensive I would wait you know it's on the borderline it's right there right so it moved closer back to being a buy that's where I started the year I started the year recommending Palante tier stock as a buy and then I downgraded it because the price went up so much not because the business was in bad shape it's just the price went up so much that the risk versus reward balance now I didn't like so much now it's moving back to being more favorable so palente made great progress there and they intend to continue relentlessly Landing new customers and subsequently expanding those relationships as our products gain traction and have meaningful impact within Enterprises it's the land and expand strategy I've heard this with many many businesses they just try and get in with the customer and then once they're in they are confident that their service is so valuable that they can expand and and offer that business more and be able to gain more revenue and so they sustain their high volume of boot camps with over 9915 organizations participating and they expect the positive favorable unit economics and higher throughput to continue to accelerate our business that's great to hear not only is revenue growing but it's accelerating the second derivative is increasing which I like when I'm looking at an investment in the first quarter they added 41 net new customers in US commercial which was an increase of 69% year-over-year and that just goes to highlight the opportunity ahead right they increased 69% year-over-year but that was only 41 customers they're still so small in terms of the number of businesses they serve that the opportunity is so large and the reason they're so small in the number of businesses they serve is because they're so expensive paler is a best-in-class service very few businesses can afford them right now but as paler gets better and is able to lower their cost to serve they can expand that opportunity set and reach more businesses because they will be more affordable to more businesses so all in all the full picture I really liked what I saw from paler the strategy the land and expand strategy I like that strategy from paler because their service has proven to be a really good service businesses have demonstrated have given them the feedback to give them the confidence like yes we know that when we go into a business and we offer our product that business becomes more profitable and so we can feel comfortable getting in there because that business will realize after 3 months 6 months 9 months or 18 months that as a result of our relationship with the business that business is more profitable so that business will want to spend more with us because we can do more and more for that business to make that business more profitable so I like this strategy from paler when you have this kind of confidence this many years of relationships with businesses and governments where you've gained confidence that that your service is so valuable then this strategy works and you're seeing evidence of that strategy so I can understand the strategy I like the strategy and that's partly why I've you know upgraded a notch higher my recommendation for paler star
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