Q4 results confirmed the trend and inflection point for us. But with today’s results, the trend has made a slight reversal. Why? Management cites the US government shutdown, which delayed contract revenue recognition in the Global Security Business line:
“... the US government shutdown delayed our capacity to recognize certain of revenues during the first quarter of 2019. Further, the US government shutdown delayed the negotiation of new contracts. However, the government shutdown did not result in the discontinuation of any RIWI work in this sector.” Since RIWI’s work was not interrupted – only their ability to recognize revenues – we’d expect to see a bump in future quarters this year. And beyond this business line, outlook remains very strong for this company. Have one look at RIWI’s MD&A – it’s a must-read. It’s one of the more bullish reports we can recall reading. Here are a few highlights: Management expects that our finance-focused clients, which together generated approximately 25% of our combined revenues in 2018, will grow by at least 150% in 2019 based on existing contracts and contracts in active negotiation. RIWI’s Global Citizen Engagement business line accounted for approximately 45% of RIWI’s revenues in 2018, and, based on the growing diversity of inbound customer inquiries and continued long-term signed agreements, management expects its 2019 revenues to exceed 150% of its 2018 revenues in this business line. Outside of the finance sector, management foresees winning a diversity of long-term clients in the private sector… Comments like these – along with the financial results – are clear evidence to us that RIWI has A) a unique, scalable model for gathering data and delivering predictions and B) these analytics are extremely valuable to clients. We expect this momentum to continue in 2019 and will be watching closely for contract wins in both the public and private sectors. We’ve been impressed with the execution of Neil and his team and look forward to what 2019 brings from this undiscovered company. We’ll continue to look to add to our position on weakness. And we’ll encourage everyone to read Neil’s letter to shareholders – it’s a great primer on this management team and why we invested in this company. Disclosure: Paul, Brandon and Keith are long RIW:CSE | 
