Particularly for large MPS engagements, there can be substantial costs that are absorbed by the provider at the beginning of a contract. These costs are due to repairing printers that have been in need of major repairs, stocking toner in advance of billing, high-CPP printers in a competitive transaction, etc. It can take over a year for some of these large engagements to reach profitability, and it seems like that Auxilio only engages with large healthcare clients. In healthcare, if the provider does not understand the types of jobs that are being printed, they can end up barely treading water. For example, if doctors choose to print X-rays (>90% coverage) for patient files, a few printers can kill the profitability of the entire account.
At some point, Auxilio's older clients will start to reach profitability, particularly if they do a decent job of fleet optimization. The challenge is going to be for them to determine how much business they can handle so they are not constantly incurring more start-up costs going after new business than they are bringing in profit from more mature engagements.