~$30M capped ROC signs $9.1M PER YEAR revenue deal with major global retailer - for 5 years. Nearly ~1,400% increase to ROC’s last year revenue.

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 6,430,000 ROC Shares at the time of publishing this article. The Company has been engaged by ROC to share our commentary on the progress of our Investment in ROC over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.

Our Investment, ~$30M capped AI tech company RocketBoots (ASX:ROC) just signed one of the best deals we have ever seen from any small ASX listed tech company.

Approximately $9.1M annual recurring revenue...

(that’s $9.1M PER YEAR)

for at least 5 years... and probably beyond.

That’s not a typo.

(for context, ROC’s total revenue last financial year was $660k according to their FY25 annual report)

With one transformational deal they have increased their yearly revenue by ~1,400%...

With this deal now closed, by our calcs ROC still has about ~$61M of potential revenue in its “advanced stage pipeline” across 13 global companies (more on this in a second).

(and have today proven to the market they can close major deals)

To see such a large, global deal get signed by ROC is also a major validation for other potential customers in ROC’s advanced stage sales pipeline.

Today ROC announced “A Transformational Global Contract with Tier-One Retailer for AI SaaS Solution”

(ROC can’t reveal the customer name, which is a common request from giant global companies)

(Source: ROC announcement)

ROC’s “Vision Artificial Intelligence” technology is used by giant companies (like major retailers and banks) to analyse and respond to in-store customer behaviours.

(basically this means using AI on live in-store camera footage to analyse customer behaviours, allowing the giant company to improve operations across its sites)

We Invested in ROC back in March because the company had a genuine use case for AI and was developing its AI tech years before AI became the hottest thematic in the world.

And now ROC has just signed a major global retail customer on a giant deal that adds approximately $9.1M annual recurring revenue to ROC....

(again, for context, in FY25 ROC reported $660k revenue)

(Source, Source, Source)

So today ROC just increased contracted annual recurring revenue by nearly ~1,400%... with just this one deal.

(noting from ROC’s announcement that revenue from this deal will be received as and when the tech is activated at different customer sites, so the ARR will build up to $9.1M until all the sites are rolled out)

This deal alone is worth approx. $9.1M in recurring revenue EVERY YEAR for at least FIVE years...

(sorry to repeat ourselves... we are still trying to let it sink in)

Aside from the headline number, another key point to note is the deal only covers ~40% of this one new customer's “global store network”...

If this one global customer decides to roll out ROC’s tech across the other 60% of its stores, we can extrapolate to bring the total to $22.5M annual recurring revenue to ROC.

(no guarantees of course)

(Source)

So how does the ASX value Annual Recurring Revenue like this?

Annual Recurring Revenue is a tech industry term for the yearly repeatable fee a customer pays to use a software or technology.

Tech investors like this metric as it provides a clear basis for assessing a company’s future financial performance.

On the ASX, SaaS or tech companies are generally valued at between 6x to 15x their Annual Recurring Revenue (ARR).

(some market darlings that keep delivering and growing even get a 100x multiple - like Pro Medicus)

So rough calcs on 6x to 15x ARR, after today’s deal, says it would be reasonable for ROC to be trading somewhere in the range of $54M to $135M market cap... (~40c to ~$1 share price).

This is not a price target though. These are just our rough “back of the napkin” calcs. There’s plenty of reasons ASX listed tech companies trade at different ARR multiples, there are also risks involved in small cap tech stocks.

(more details on how ROC stacks up from a valuation perspective in a second)

ROC still has ~$60M of potential new deals in their advanced stage sales pipeline...

This isn’t ROC’s first deal.

ROC already has Bunnings, Suncorp, a major Mexican retail bank and a major unnamed Australian bank on as paying customers.

4 weeks ago, we analysed ROC’s advanced stage pipeline (meaning the potential value of the customers that are “in advanced stage commercial negotiations with ROC”).

ROC said in an announcement on 19th November:

“The Company continues to progress advanced commercial discussions across 14 international enterprise customers, representing ~20,000 potential sites across grocery, retail and banking verticals.”

(Source: ROC Announcement 19th November)

So based on the assumption that ROC charges ~$3,500 per year per site for its tech (source, ROC investor deck slide 10).

And ROC said there are ~20,000 sites across 14 customers in “advanced commercial discussions”...

We calculated that ROC’s advanced sales pipeline amounts to a total potential contract value of ~$70M across 14 international enterprise customers. (Source)

That was on the 19th of November...

BUT...

After today's successfully closed deal for $9.1M with ONE customer, ROC’s advance stage sales pipeline sits at 17,000 sites.

Using the same $3,500 per year per site assumption...

ROC’s remaining advanced stage sales pipeline now works out to be ~$60M across 13 potential new customers.

So there still could be a lot more to come...

(of course like any sales pipeline, there’s no guarantee it all converts, and timing is always uncertain, plus these are just our very rough calcs)

The key point here is that today ROC has proved they can convert opportunities in their advanced stage sales pipeline into MAJOR deals with enormous yearly revenue (compared to ROC’s current market cap), from international enterprise customers.

We think today’s deal will change the market perception of the company from “delayed deals” to “a company that can get deals done”.

(now they just need to successfully deliver to the customer)

And finally the market can start valuing ROC the way other tech SaaS businesses get valued in the current market (6x to 15x ARR multiple).

We can't stress enough how much of a validation it is for other potential customers in ROC’s advanced stage to see such a large, global deal get signed.

We think this could be one of those deals that spurs other customers who may be “on the fence” with ROC to sign up - “if it's good enough for a Tier-1 global retailer, it's good enough for us”.

There aren’t many ways of getting genuine AI exposure in the small cap ASX space at the moment.

(especially AI companies that actually make revenue...)

We think ROC is one of very few ways to get genuine exposure to AI being applied in a small cap tech stock on the ASX...

Deals like the one ROC has signed today is a big reason why we Invest in early stage tech stocks.

And today, we think ROC has signed the deal that could take them into that exponential “surging growth” era of the company's life:

ROC has been “turning the hockey stick corner” over the last few months, building on its existing long term clients with a rapid succession of smaller deals, culminating in today's monster contract.

And here is that potential hockey stick style growth in revenues after today’s deal:

(Source, Source, Source)

As we said above, ROC’s tech is currently in use by TWO major, Australian household name companies - Suncorp in the banking sector and Bunnings in retail shopping.

~4 months ago ROC signed a $140k, three month trial with a major Mexican retail bank - a customer with over 1,000 branches (source).

~5 weeks ago, ROC announced a $320k contract RENEWAL across 250 sites with a “Major Australian Retailer” - with the partnership moving into the 8th year running (source)... (we assume this is Bunnings)

4 weeks ago, ROC announced a new “Major Australian Retail Bank” that had commenced a trial back in August has converted to a contract rollout worth $190k in year 1 (source, source).

The “stage A” roll out is to less than 10% of this bank's branches and future site rollouts are being evaluated with decisions expected next quarter - so still plenty of room to grow.

And, today, ROC did a ~$9.1M deal, effectively increasing ARR by ~1,400% once fully rolled out.

Today’s major deal could change the way the market values ROC

On top of changing the prospects of the business - these big deals also change the market’s perception of a company.

Over the next 2-3 months, the market could:

1. Start to price in the implications of today’s deal - High growth tech stocks can trade at ARR multiples of ~6x to 15x... based on today’s deal alone that would put ROC’s market cap at ~$60 to $130M (not a price target, just some back of napkin ideas here).
2. The market could start building in ROC’s $60.9M advanced stage pipeline to the company’s valuation - this is where investors could start to price in potential future contract wins and start coming up with their own estimates of how much of that pipeline ROC can convert.

All it takes is for a few investors to start running their own numbers, landing on a $20-30M ARR target and then applying a 10X multiple and we could see ROC’s valuation move a lot higher from where it is today.

(again we are just throwing some numbers out here, it’s almost impossible to forecast with any surety how ROC will perform over coming months.)

Things can get really extreme if the market sees a company execute a strategy really well.

For example, AI imaging software company Pro Medicus reported Annual Recurring revenues for FY25 of ~A$213M and its market cap is $23BN.

That is an ARR multiple of ~100X...

The first big deal Pro Medicus signed was back in April 2016. (source)

Pro Medicus' first major breakthrough contract was with Mercy Health in April 2016. This was a 7-year, A$21 million deal that marked a pivotal moment for the company.

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

ASX market darling Pro Medicus is definitely an outlier (a great business with an even greater valuation) but it is a datapoint that demonstrates that valuations can go anywhere with these high growth, highly scalable tech companies...

Remembering again, ROC’s market cap was just ~$32.5M at its last traded price of 19c per share.

(more on the markets and how ROC’s tech works in a second).

Coming back to that hockey stick from earlier - this is where tech companies can start being valued on high multiples, because of that exponential (the stick part) growth potential:

The positive for companies that get to trade on those multiples is that it also makes the cost of capital cheaper (raising capital becomes easier).

And then companies can really start to scale up as most tech businesses operate in industries where economies of scale are exponential.

How does ROC’s tech work, and what is the Total Addressable Market?

ROC developed its “Vision Artificial Intelligence” technology for giant companies to analyse and respond to in-store customer behaviours.

Basically this means using AI on live in-store camera footage to analyse customer behaviours, allowing the giant company to improve operations.

Or in a supermarket setting for “loss prevention”, providing a solution to a big problem the supermarket giants face at their self checkouts - theft.

(this is called ‘shrinkage’ in the retail industry - all up its estimated to cause a US$100BN plus annual loss to retailers - this impact on the bottom line is why retailers are so interested in ROC’s technology)

ROC’s tech is currently in use by TWO major, Australian household name companies - Suncorp in the banking sector and Bunnings in retail shopping.

And in the last ~4 months ROC signed a deal with a major Mexican retail bank AND

a new “Major Australian Retail Bank”.

Most of those deals are small relative to the monster deal ROC signed today.

So ROC is already established and operating in two markets that we think are big enough to drive a substantial re-rate higher in ROC’s valuations:

(especially after today’s news)

1. AI-driven loss prevention - The market ROC is targeting for this are retailers that have implemented self-checkout systems. ROC estimates this to be a ~$100BN per annum problem. ROC’s solution can help reduce this problem. (This is the part of the business today’s deal relates to.)

AND

2. AI-enabled labour optimisation - ROC also sells workforce management tech. The global workforce management market is estimated to be US$8.38BN in 2025, growing to US$13.03BN by 2030.

For some context - other companies in the vision capture space have traded with market valuations in the US$250M-$500M range.

In late 2022 a company called Trigo raised US$100M off the back of its grocery vision software. (source)

In 2023 one of the largest companies in this space Everseen raised US$70M to advance a very similar technology. (source)

At the time Everseen pulled off that raise, its revenues were ~US$40M per annum. (source)

Those large raises are evidence of the size of the opportunity in this space that investors are seeing.

Now after signing today’s deal, we are hoping ROC can do something similar - once the dust settles on this transformational deal, it can pull off a big raise (hopefully at a premium to the current share price) and start aggressively scaling the business.

(Deployments from today’s deal are scheduled to start in Q1-2026)

Ultimately, the next major catalysts we think will re-rate ROC will be follow-up deals that help the company achieve our Big Bet which as follows:

What is our Big Bet for ROC?

“ROC re-rates to a $200M market cap by securing multiple large recurring contracts with retail clients and scaling up its business”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is a lot of work to be done, many risks involved - just some of which we list in our ROC Investment Memo. Success will require a significant amount of luck. There is no guarantee that our Big Bet will ever come true.

8 key reasons why we are Invested in ROC

Below is a reminder of the 8 key reasons why we like ROC from our 31 March initiation note.

We have added a few new updates after today’s mega deal:

1. ROC already has long term, paying enterprise customers including Bunnings and Suncorp.

Both Bunnings (large DIY goods retailer owned by Wesfarmers) and Suncorp (a bank owned by ANZ) are paying customers of ROC.

They have been customers since before ROC’s December 2021 IPO and continue to renew and expand their licence contracts 7+ years later.

This is strong evidence that ROC can sell its product to enterprise customers, and that those customers find long term value out of the service.

2. Over ~$35M in potential annual recurring sales from “advanced stage deal pipeline”

According to ROC’s most recent quarterly report, ROC had 10 customers in its “Advanced Pipeline”.

These customers represent over 10,000 sites in total.

At $3,500 per site per year, by our rough, basic calcs this represents over $35M in potential annual recurring revenue if ROC is able to convert into sales.

(using a basic $3,500 per site per year times number of sites calc, ignoring bulk discounts and setup fees)

Even if just 10% of that “advanced stage” pipeline is converted, it would be 3.5x ROC’s current revenues.

UPDATE:

ROC confirmed today that it still has an “advanced stage pipeline of 17,000 sites” across grocery, retail and banking verticals.

As mentioned earlier, our back of the napkin calcs show that ROC’s advanced stage pipeline could be worth ~$60M in potential annual recurring revenue.

Again - there is no guarantee these pipeline deals turn into revenues for ROC.

3. One large deal could multiply ROC’s current revenue

If ROC is able to sell to a large multinational contract it could have its product in thousands of stores through just one deal.

At a price point of $3,500 per store, one deal could be in the millions of dollars in recurring free cash flow.

These deals take a very long time to secure (as do most enterprise software deals).

ROC has shown that its enterprise customers tend to be incredibly “sticky” (stay on for a long time)

UPDATE:

ROC signed its first major deal today.

$9.1M in Annual Recurring Revenue, from one customer, which is for only 40% of that customer’s global store network.

Today’s deal increases ROC’s revenues by ~1,400%.

4. Partnership with Europe’s largest Point of Sale company: Gebit Solutions

Gebit Solutions sells self checkouts to supermarkets and retailers.

Gebit is the point of sale system for some of the largest supermarket retailers in Europe and Gebit will now support an “out of the box integration” with ROC’s software.

High-synergy partners like Gebit help improve ROC’s reputation to enter the conversation with big retailers, despite ROC being a smaller player in the space.

5. Original founding team still in place, with a new experienced tech chairman at the helm

The original team that developed ROC’s technology in the early 2010s are still running the company (including the CEO and CTO).

This is a positive sign for tech startups when a long term founding team has been working on the product for 10+ years.

Now however, ROC has a new chairman with experience in both private equity and tech enterprise sales.

ROC’s new chairman Roy McKelvie is also the chairman of an education technology company called Pathify that he helped to scale and raise US$25M at a A$180M valuation.

Roy invested $200,000 personally into ROC last year at 8.5 cents and a further $90,000 in the current placement.

6. Genuine AI and deep knowledge of how to apply AI to a specific problem

ROC’s AI and machine learning technology has been developed since 2010.

(well before AI became a big Investment theme)

Companies developing genuine AI with over a decade of development efforts AND internal knowledge on how to apply AI to solve a specific and real world problem are rare on the ASX...

And in our view are the best positioned to leverage and apply the rapid recent advances in AI technology and tools to their specific sector of expertise.

7. Vision capture technology valued in the US$250M-$500M range

In late 2022 a company called Trigo raised US$100M off the back of its grocery vision software.

In 2023 one of the largest companies in this space Everseen raised US$70M to advance a very similar technology.

Those large raises are evidence of the size of the opportunity in this space that investors are seeing.

If ROC is able to deliver more sales and capture market share, it could grow to the size of these larger competitors in the space.

8. ROC has a good capital structure with strong ownership represented in board and management

Following today’s capital raise news and its completion, ROC will have 154 million shares on issue.

The major shareholders are the original vendors of the technology and have proven to be sticky since the IPO.

The board and senior management represent ~44% of the shares on issue prior to this recent capital raise, which means they are very aligned to shareholders interests.

UPDATE:

The Bombora Special Investments Growth Fund is now a substantial holder of ROC with 7.30% of shares. (source)

Bombora has had a previous win with ROC’s chairman - we covered Bombora’s investment in our last ROC note here: ROC to bank another $1M, secures new strategic investor, and board member.

What’s next for ROC?

🔄Sales updates

We want to see ROC close deals, with updates that include the number of sites that ROC’s tech will be deployed to and contract dollar values.

Today’s announcement also said

“This contract win has converted around 15% of RocketBoots’ former advanced pipeline into contracted ARR, leaving an advanced-stage pipeline of approximately 17,000 sites”.

And “early-stage pipeline of approximately 32,000 sites”...

(Source)

So there is still another ~$60M in opportunities in ROC’s advanced stage pipeline.

Fingers crossed a few more of these get converted in quick succession.

Here are the milestones we are tracking:

New Sales: Retail/Supermarket

✅ New customer 1 (Today’s deal)

🔲 New customer 2

🔲 New customer 3

New Sales: Consumer Banks

✅ New customer 1

🔲 New customer 2

🔲 New customer 3

Existing customer re-signs or expands:

✅ Contract re-sign with existing customer

What are the risks?

The key risk we see now for ROC is “funding risk”.

ROC ended the most recent quarter with $1.1M in cash. (source)

At the same time, ROC had a cash burn of ~$1.4M for the last quarter, so it's possible the company will need to raise cash in the coming months.

We are hoping today’s deal makes raising that capital a lot easier.

Funding Risk

ROC is a small cap stock that is spending more money than it is making. If the company has not been able to secure a major deal in that time then it may be doing the next raise at a lower valuation.

Source: “What could go wrong” - 31 March 2025 ROC Investment Memo

We list more risks to our ROC Investment in our ROC Investment Memo here.

Other risks

ROC operates in a rapidly evolving AI vision market. Larger, better-funded competitors could emerge and challenge ROC’s position or put pressure on pricing.

The technology depends on in-store video and behavioural analytics. Changes in privacy regulations or public attitudes could increase compliance costs or limit deployment opportunities.

Currently, ROC’s revenue comes from a small number of key clients. Losing any one of these could have a significant financial impact.

Scaling from initial trials to broader rollouts will test ROC’s operational capabilities. Delays, integration challenges, or customer service issues could slow growth.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

Our ROC Investment Memo

In our ROC Investment Memo, you can find the following:

• What does ROC do?
• The macro theme for ROC
• Our ROC Big Bet
• What we want to see ROC achieve
• Why we are Invested in ROC
• The key risks to our Investment Thesis
• Our Investment Plan