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Who are Plover Bay’s customers and users?
Plover Bay sells to a global network of Value Added Distributors (VADs) and Value Added Resellers (VARs). These parties use their local expertise to design, integrate and service networking solutions for their customers who are ultimately our end users of Plover Bay. End users are typically enterprises, government organizations or prosumers from a large range of market verticals, including maritime, public safety, enterprise, retail, healthcare, transportation, industrial / utilities, autonomous systems, etc.
We also directly sell a small portion of our products to end users through major e-commerce platforms.
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Who can be your distributors? What are their incentives?
We assess a potential distributor based on whether it has a good market understanding, technical savvy, attention to details and more importantly, a strong ambition and drive. It is very similar to our hiring process.
Distributors will be able to offer our unique technology and solutions to a broad growing market. Our sticky ecosystem and the subscription elements that comes with almost all of our products also offer attractive recurring revenues. We also have a highly automated backend system to support partners doing business around the clock. As our products become an important part of our distributor’s business, their profitability scales very well with our business model.
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What are included in our “one-time sales” and “recurring revenues”?
One-time sales:
Sales of routers and software licenses. Once a user purchases a router or software license, the user owns it permanently
Recurring revenues:
Embedded warranty and services and their subsequent renewals. User must renew their subscriptions at regular intervals in order to continue to using these services.
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Is the company’s revenue mostly project based? How can the company sustain its growth?
Over the years, we have created a well-diversified and balanced sales channel across many countries and industries. While VADs and VARs continue to be the main sales channel for us, we are also broadening our channel with e-commerce and working with more new VADs in new markets. These measures have resulted in a broad-based growth across all our geographic segments and do not rely on any particular large projects.
Secondly, we continue to enrich our ecosystem to encourage more recurring revenues. For example, we introduced the highly attractive PrimeCare plans which include router, warranty and all necessary licenses on a yearly subscription. We also launched SpeedFusion Cloud in 2020 which allows users to substitute upfront server hardware with data bandwidth allowance. We will continue to launch new services, such as SpeedFusion Connect, to broaden our recurring revenue stream.
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What is the company’s R&D process?
Our R&D process begins from the user feedback. Over the years, the Peplink forum has accumulated a knowledgeable user community. This community comprises end customers, reseller partners, distributors and system builders who regularly contribute ideas for new products, enhancements and ask questions. These ideas with our assessment and market observations form the basis of our new products and services. Our team then carries out experiments and continues to refine these ideas to obtain the best results.
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With relatively low spending on Selling & Distribution, how does the company keep up its growth?
We believe that in the digital world where end customers can easily self-educate on what to buy, the traditional way of spending large amounts to hire high-profile sales teams to maintain relationships with customers is no longer efficient.
Instead, we work closely with entrepreneurial distributors and resellers who often generate sales leads from local businesses, governments and network operators.
Our marketing team builds the brand of Peplink with an extensive library of digital marketing content on social media platforms and popular video streaming sites. Partners can also leverage these contents to create their own localized marketing contents on social media.
The result is a very efficient sales customer acquisition that does not require huge investments.

How will you weigh the tradeoff between returning capital to shareholders and reinvestment in your business?
We are committed to a return capital to shareholders after setting aside sufficient cash resources and buffers to sustain our daily operation needs. Our daily operations needs include ongoing R&D spending, engineering resources, employee salaries, inventories, and small amounts of capital expenditures. From time to time, we may identify suitable investment or acquisition opportunities that require us to set aside additional resources, which may cause our dividend payout to differ from our historic levels.
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