Bigtincan announced a non-binding takeover offer today at 80c. Deja vu. In Dec 22 they had another non-binding offer which didn't proceed for the same price. A week later they had a capital raise. Call me suspicious......

Notably absent from the announcement of any sign of making a profit. It was all about doubling the ARR. BTH are already making a loss on strong ARR growth. The absence of any profit discussion makes me think the acquired also makes a loss. So now we'll have a $100M revenue company making a loss and a large market cap.

You can see that I have owned shares for quite a while. The investment is now going into territory that I'm not comfortable with because it relies on sentiment rather than making a profit. I obviously don't mind fast growing companies that make a loss (I invest in many of them) but I like profitability to be in sight.

Further to Tom73 Straw, BTH was cash flow positive for the qtr. Also the ARR now stands at $53M and cash expenses for the entire FIN 21 yr were $41m.

The big deal here is that assuming expenses remain in check, BTH are now moving into a good cash flow positive position.

48% growth in ARR for the year.

"Bigtincan is pleased to confirm that it has achieved $53m in Annualized Recurring Revenue (ARR) surpassing previous guidance of FY21 ARR to be at the top end of $49m-$53m, representing 48% ARR growth over end June 2020."

In the attached image you can see that their revenue is broadly based across different types of business and that almost all of it comes from the US

asx announcement

BTH has acquired a company that's software that can measure human perception of voice. BTH will integrate it with their platform so that clients can train their salespeople. This sounds like a really nice addition. THe platform already has the content, so now salespeople can be better at delivering it.

• Bigtincan has acquired 100% of VoiceVibes, a Baltimore, Maryland based company and leader in voice analytics for US$2.0 million.

• VoiceVibes’ technology provides automated coaching that helps people sound more natural and polished when they speak, so they can transform how others perceive them.

• VoiceVibes patented technology, when added to Bigtincan’s core sales enablement automation system allows Bigtincan to offer automated coaching and sales guidance.

VoiceVibes’ proprietary data set is one of the largest in the world that can measure human perception of voice. This vast data set is used to figure out how humans perceive emotion and intention from your voice. An independent study by Towson University showed that VoiceVibes successfully predicted 11 "vibes" (ways a human would perceive a voice) with at least 97% accuracy, and all 20 vibes with at least 90% accuracy.

Another strong update from BTH this week

• Customer cash receipts increased 89% to $10.4m, from the June 2019 Quarter of $5.5m.
• Cash operating payments increased 74% to $12.3m, against $7.1m for the previous corresponding quarter.
• Annualised Recurring Revenue (ARR) year on year growth of 53% to $35.8m, with organic ARR growth of 40% to $32.7m. 5-year ARR CAGR of 50%.

• Cash and cash equivalents of $71.9m at the end of the June Quarter.

Cash operating payments were up from previous qtr of $11.1m. This is conistent with their stated yearly 40% organic growth .

They break even from a cash-flow basis so I am not sure why they raised cash to now have $72m in the bank. Their market cap is $350m - so they hold 20% of their market cap in cash!

One downside is that they did capitalise some development work.

For the next qtr I'll be watching for whether their costs remain stable and growth starts to go straight to the bottom line.

https://www.asx.com.au/asxpdf/20200728/pdf/44kwpzlp93ttgv.pdf

Great update from BTH this week. https://www.asx.com.au/asxpdf/20200428/pdf/44h988v0fgzqgc.pdf

• Bigtincan had $31.5m in cash and cash equivalents at the end of the March Quarter. Cash flow positive +$5M for the qtr and now +$1.6M for 9 months. This seems like a strong inflexion point in profitability
• New wins with Fortune 500 companies delivered in the quarter, including DXC.
• Bigtincan reaffirmed guidance for FY20, and remains on track to deliver 30-40% organic revenue growth,with stable retention in FY20
• Customer cash receipts for the Quarter were $14.9m, an increase of 178% over the previous corresponding periodand a 65% increase over the previous December 2019 quarter of $9m.

One downside is some capitalised software development.

Spewing that I missed this weeks drop to 26.5c. It's now back to my original purchase price of 40c after reaching $1 and then being crunched. Perhaps in response the board put out the following announcement to reaffirm guidance. https://www.asx.com.au/asxpdf/20200320/pdf/44g77jpgtms43y.pdf. I didn't have time to re-evaluate during the week, waiting for the weekend, and hence lost my chance.

The board re-affirmed guidance for the year of 30-40% organic growth. That's very impressive and they back it up to say that they already work remotely, have global workforce and sales, diverse customer base, fortune 100 customers, no single customer > 10% revenue, but I am a little skeptical. Their points relate to a high level of retaining existing revenue, but I wonder how much new custom they will get. Maybe they have already achieved that goal since we are in March and EOY is only 3 months away.

They have $10M in cash, burnt $4M last half yr. Interesting they only spent $3M on general admin whilst spending $8M on sales and marketing and $6M on product development. So they have enough cash for a year and then can easily scale back sales & marketing and product development to reign things in.

So they have enough to ride out the downturn and have the product that organisations will want to generate sales in the future. I'm still positive. Market cap to ARR is now 4.

Good results from BTH. https://www.asx.com.au/asxpdf/20200227/pdf/44fj0xs7z5n0c1.pdf

Figures below are 1H20 in comparison to 1H19

ARR $32.4m Up 55%

Retention 89%  Up 2%

LTV$ 252m Up 84%

Subscription revenue $13.6m  Up 59%

2/3 of the growth was organic. 1/3 acquaried.

Founder led SaaS with 90% of revenue coming from US. Fantastic set of large clients.

Customers include. T-Mobile, Verizon, Optus, AT&T, ANZ, Merck, Palo Alto Networks 400+ customers across 3 continents•  150,000+ licensed seats• Established Fortune 100/500 customers across key vertical markets

Such large client should mean high retention rate - now 87%.

Growth - Revenue - 35-40% organic. 63% ARR in 1H19. Now cashflow break even. Have a look at ARR growth in one of the ASX announcements straws.

There have been 2 large new sales since the 1H19 report adding another $5M/year ARR

Debt - none

Development (R&D) is expensed rather than capitalised - which is good.

David Keane and Geoff Cohen are founders. David Keane is CEO. Keane holds 14% of shares. Cohen 10%.

Closely held. 80% held by top 20 shareholders.

not good is that # shares - has been increasing for acquisitions by a lot from 130M to 220M in 3 years
 

https://www.asx.com.au/asxpdf/20190221/pdf/442t641s7tvj9j.pdf

No debt, 56% revenue growth. Loss $2M. $13M cash. 87% retention

See the attached picture for a good snapshot. The picture is from https://www.asx.com.au/asxpdf/20190221/pdf/442t65x1p1hxk9.pdf

Bigtincan Holdings. It sells a software product that enables sales and service organisations to engage with customers.

According to Gartner, “Digital content management for sales (DCMS) applications encompass repositories, authoring tools, collaborative environments and interfaces for publishing, versioning and presenting content. These applications help many content owners distribute key sales-oriented and customer-facing materials to salespeople (both direct and indirect), who use these materials to more efficiently and effectively develop and close business. DCMS applications improve the delivery of internal- and external-facing content to salespeople. They support objectives such as improving engagement with prospects and clients, increasing win rates, increasing deal velocity and growing deal sizes. Commonly used to support long-cycle B2B and B2C sales processes, they also apply to indirect sales processes, such as detailing merchandisers on the retail selling floor.”