[UPDATE] Intouch Insight (INX.V): Finding Asymmetry After a Failed Experiment

After decisively cutting a failed acquisition, messy financials hide a compelling, asymmetric risk/reward at a depressed pico-cap valuation.

Disclaimer: I own shares of Intouch Insight Ltd. and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. AI tools assist my research and writing process, enhancing analytical efficiency and clarity.

[UPDATE:

• 20251120: CEO Cameron Watt kindly responded to several questions of mine, which I believe warrant this revision. I integrate them below in this updated version, with changes tracked.
  CEO Cameron Watt kindly responded to my questions, providing significant clarity on key points. This article has been revised to reflect that new information.

  Key updates can be found in the sections on:

  • Thesis Summary & Conclusion

  • R&D Spending (Financial Analysis)

  • SaaS Growth (Key Trends & Risks)

  • Key Questions to Track]

TL;DR

Intouch Insight is a stable, cash-generative services business trading at a depressed valuation despite materially improved margins, offering an attractive base-case yield with a free option on disciplined, accretive M&A, SaaS re-acceleration, and organic growth.

Photo by Sébastien Goldberg on Unsplash

Introduction

For most multi-location businesses, the real challenge is not strategy—it is consistency. A brand can design standards at headquarters, but the customer experience is ultimately delivered thousands of times a day by employees whom executives will never meet. Ensuring that a store in Omaha operates to the same standard as one in Orlando is both operationally difficult and commercially essential.

Intouch Insight (TSX.V: INX) exists to solve that problem. For years, it operated as a steady, cash-generative provider of measurement services—mystery shopping, operational audits, and customer experience insights. More recently, it layered a proprietary SaaS platform on top of this services base, creating an integrated offering that has historically delivered stable recurring revenue, high client retention, and disciplined, internally funded growth.

But in 2023, the company made a misstep: the Ardent acquisition. It added revenue but diluted margins and obscured the underlying economics of the business. Earlier this year, management reversed course, exited the low-quality programs, and refocused the company on profitable growth. The result is a leaner business with improved margins that the market appears to be overlooking.

For reference and some more context, see also last month’s 8th Wonder Airlock protocol:

[Captain's Override] Intouch Insight (INX.V)

Thesis Summary