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#Management
Added 4 weeks ago

15 April 2021

Board Appointments

  • LiveTiles names former Executive of ASX-listed SEEK and former Executive of ABN AMRO to the Board.
  • Fiona Le Brocq and Jesse Todd bring growth expertise with Australian and global blue-chipcompanies.
  • Both candidates join the LiveTiles Board as independent non-executive directors.
  • Appointments come after extensive search as part of LiveTiles Board renewal program.
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#UnitedHealthcare
Added 3 months ago

Following a speeding ticket and trading halt from the ASX yesterday, LVT have added some further details to the new record deal.

They confirm the deal was with United Healthcare ($310B market cap if you don't mind!), with a minimum contract value of $3M, with potential to grow to $12.2M over the 3 year life of the contract. 

For me this is an important reassurance that the product adds value in the COVID/post-COVID period and as a signal that growth continues. Now I just want to see continued cost control to avoid another cap raise.

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#Contract Win
Added 3 months ago

LVT secures record 3y multimillion dollar deal with one of the largest healthcare companies in the US and top 10 member of the Fortune 100. 

Up +18% on the news today so far to $0.295.

This was hinted at at the last investor call, of being close to annoucing some big contracts.

 

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#Newdeal
Added 3 months ago

17th Feb,  Livetiles record record new 3 year deal with Fortune 100 healthcare company. 

As hinted at in previous quarterly results call, the first of 2 record deals for livetiles has been closed, effective immediately to 300,000 employee workbase. Supposedly top 10 member of Fortune 100. 

 

They note the start of CY21 has had strong positive momentum, with Livetiles Reach the product sold. 

 

Disclosure: held

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#Multi $M New Deal 17/2/21
Added 3 months ago

Record multi-million dollar deal with US-based Fortune 100 Healthcare company

• LiveTiles signs record deal with a three year multi-million dollar agreement.

• The healthcare company employs over 300,000 employees and signals strong acceleration in digital transformation needs in the healthcare industry.

• The deal includes many of the core LiveTiles products and validates the strong growth in the Employee Experience Platform category that LiveTiles pioneered.

• This is the second record breaking deal for LiveTiles in less than four months.

Disc: I hold

View Attachment

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#Takeover speculation
Added 3 months ago

Shares in LiveTiles were earlier placed into a trading halt at the companies request, as it prepared a statement in regard to media speculation that an overseas buyout fund had approached it in regard to a control transaction.

While the company acknowledged that it does receive approaches from time to time, it was NOT in any current discussions with any parties.

Trade resumed after the announcement was issued, and shares have shot up over 14% (at time of posting) despite the company denying any talks with potential suitors. Go figure!

The article in question appears to be from the AFR (here for those with a subscription). The key part of the article in StreetTalk was:

"Street Talk understands small-cap Livetiles has called in Credit Suisse’s investment bankers as defence advisers, after fielding approaches from some specialist software buyout types offshore.

While interest was said to be early-stage and there was no formal process under way, Livetiles is understood to be keen to explore its options."

Who knows what is really going on, but i wouldnt personally be buying shares on this rumour/speculation alone. 

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#Private Equity Invested
Added 3 months ago

3 Feb 21: Here is the AFR articles on the private equity interest in LVT. 

ASX-listed Livetiles drafts in Credit Suisse for defence
The tech rally has left ASX-listed workplace software business Livetiles Limited behind, and don’t a bunch of offshore private equity funds know it.

Street Talk understands small cap Livetiles has called in Credit Suisse’s investment bankers as defence advisers, after fielding approaches from some specialist software buyout types offshore.

While interest was said to be early stage and there was no formal process under way, Livetiles is understood to be keen to explore its options. If there’s someone who is serious about paying up for the company, then they may as well know all about it.

Sources reckon a lot of the attention on Livetiles stems from its languishing share price, which has fallen more than 16 per cent in the past 12 months to 20¢, while the ASX all tech index is up 40 per cent.

On top of that – and while it’s far from an apples for apples comparison – Aussie-founded employee management software Atlassian is trading at 25 times forward revenue, while Livetiles is sitting at 2 to 3 times.

All that spells a potential bargain price for a cashed-up suitor, and maybe a chance to realise some value by taking the company private.

Founded in 2014, the $185 million Livetiles sells a bunch of software products including Reach, its internal communications tool and workplace intranet that’s used by the likes of Tabasco hot sauce maker McIlhenny Company.

It generated $64.7 million annualised recurring revenue at December 31 from more than 1100 customers, and had $19.2 million cash on hand.

Headquartered in New York City, Livetiles listed on the ASX in 2015, via a reverse takeover of Modun Resources handled by Sydney broker Blue Ocean Equities. Its biggest shareholders are founders Karl Redenbach and Peter Nguyen-Brown, according to its most recent annual report.

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#Private Equity Interest
Added 3 months ago

3 Feb 21: LVT enters trading half to respond to an AFR article about private equity interest in the company. 

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#1/4ly Report 28/1/21
Added 3 months ago

ARR grows to $64.7m and record cash receipts of $13m

• Annualised recurring revenue (ARR) has grown to $64.7m on a Constant Currency basis; a 23% growth over the same quarter from last year and up 200% in 2 years. On a reported currency basis ARR has grown to $58.1m.

• Another record cash receipts quarter of $13m and 25% higher than prior corresponding period (Dec Qtr FY20). Net operating cash outflow (excluding grants and non-recurring items) of $2.7m; a 56% improvement on the corresponding period last year.

• LiveTiles Customer Lifetime Value reaches $403m, a 3x increase over 2 years.

• Cash on hand as at 31 December 2020 of $19.2m

• With increased pipeline growth in recent quarters and the successes of recently won customer deals, the business has strategically invested in expanding its Sales and Customer Success team capacity by 43% to capitalise on these opportunities.

DISC:I have a small holding

View Attachment

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#Chart
Added 6 months ago

23 Nov 20: There has been a sharp increase in share price and volumes for LVT.  It has broken above the resistance of $0.25.  The next resistance level is at $0.30.

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#Bear Case
Added 6 months ago

I don’t own LVT. It appears like it has a lot of positives going for it but I thought I’d point out what I came across regarding company culture and management. Poor company culture in particular is why I think LVT is going to have more difficulty succeeding.

 

Culture

43 Glassdoor reviews – 3.1/5

•49% would recommend to a friend

•45% approve of CEO Karl Redenbach

•Overall trend is poor (you’ll have to visit Glassdoor website to view graph)

 

Poor reviews:

30/10/20 “Started out good, now heading downhill” “…all our suggestions are ignored” “We were asked to accept a decrease in salary during coronavirus (which I thought was reasonable) but I've just seen the annual report and the CEO kept 100% of his Cost of Living Allowance.”

20/10/20 “Things at LiveTiles are not OK” “…higher-ranked staff easily get away with perpetuating toxic environments.” “Money comes from seemingly nowhere, but is generally from sales of products that don't even exist.” “You will be pushed to your breaking point and told that it's all ok because "that's just our culture"

23/04/20 “No loyalty” “One such layoff being right before Christmas - super classy” “Also a super fratty culture”

25/02/20 “Vaporware distributors. AVOID!!” “There are no real products. Terms like "AI" are used incessantly yet none exists in any product made or acquired by LiveTiles. The "leadership" team is usually in some exotic part of the world, far away from wherever actual work is being done. Various departments of the business are left selling watered down solutions (at best) because most of the VC money goes into sales and leadership "off-sites". Just look at the stock over the past 2 years. Mergers & acquisitions cover up a lack of organic revenue because no one wants LiveTiles products.”

07/02/2020 “Lay off’s right before Christmas!”

01/03/20 “If you aren’t in the circle you go nowhere” “They will always take a senior employees word over yours even if you have proof to back it up. None of the little people are listened to. You could sacrifice alot to get the job done and get not so much as a thanks.”

27/03/19 “Not as it appears to be” lack of management, “lots of acquisitions but no structure”, bonuses taken away from employees, “favoratism is ever apparent”

21/03/19 “Company needs to treat their stuff with respect and follow their own values.”

13/12/18 “It was like working for the Australian Trump Family” “Leadership. From the C-Suite to the VP level, there is no clear, consistent communication, or actual leadership. Passive-aggressive is the best way to describe the overall style. If you're not part of the small inner circle, you're screwed. Blatant lies about bonus and stock plans. Cooked books to make numbers.”

04/12/18 “No structure, and I mean absolutely none internally. The product is half baked but sold as full baked. Pricing is literally whatever the customer will pay. If you’re offered a sales position, you MUST understand you’re selling an unproven, untested, zero case study concept of possibilities, it’s a stretch to even call it a real product.”

03/12/18 “Making quarterly layoffs to boost the balance sheet and hide poor sales and business decisions cannot be the long term solution.”

24/09/18 “it's completely lost its form, rushing half baked software into the market and forcing people to sell it to unhappy and frustrated customers”

27/10/17 “Avoid at all costs” “People get away with sitting on a couch all day with your feet up and surf insta while pretending to work since management is never around and no one seems to be running the company!”

 

Reviews also mention a fully stocked bar in the office. https://www.youtube.com/watch?v=6V_sHlVQkbs

 

LiveTiles sued for $33m by employee alleging he was sacked for being old, having cancer

"which in reality was a culture of discrimination against individuals who were older, disabled, and United States citizens…prevented him from participating in the culture, marked by excessive drinking and raucous public behaviour.”

“building a fully stocked bar with hard liquor and two [tapped] kegs in the lunch area which was ‘always open’”

 

https://www.glassdoor.com.au/Reviews/LiveTiles-Reviews-E1390234.htm

https://www.afr.com/technology/livetiles-sued-for-33m-by-employee-alleging-he-was-sacked-for-being-old-having-cancer-20171121-gzphad

https://www.arnnet.com.au/article/630285/aussie-software-vendor-faces-down-legal-challenge-us/

https://www.crn.com.au/news/founders-of-melbourne-sharepoint-reseller-nsynergy-settle-lawsuit-over-assets-554999

 

 

Management

Karl Redenbach CEO (Co-founder) $853,199 + STI cash bonus $298,860 = $1,169,011

Peter Nguyen-Brown (Co-founder) $77,652 + STI cash bonus $220,000 = $773,141

These salaries seem high considering the company had a net loss of $31M for FY20 and a cash outflow of $26.7M (ignoring proceeds from issuance of shares) for FY20. Cash outflow is even worse if you remove $11.5M in government grants received.

 

 

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#Business Model/Strategy
stale
Last edited 7 months ago

(Updated with N3 churn to discuss organic growth)

This straw is in reply to INTJ a month ago regarding organic growth. 

In the Q4FY20 conference call (at either 40 or 50mins in), Karl said the impact of classifying ARR to include recurring service revenue was "a few million". This is a bit ominous given growth for the quarter was only $3M.

On an annual basis though, ARR went from 40.1M in FY19 to 53.8M at end of FY20 (4.7M of this was through the CYCL acquisition of the 13.7M growth). Thus, there was 9M annual growth excluding acquisions (your 22% figure). However, I do note there was also one off churn of 4.4M ARR when N3 partnership terminated (excl this would have been 33% organic growth).

Regardless, the question is how much of that 9M was due to the services definition. 

Given ARR customers increased from 1068 to 1092 over the quarter (circa $1.2M in ARR using average ARR per customer of 53.3k although this average is skewed lower than what recent customers are adding given it has consistently increased over time), this impact in my opinion was only $1-1.5M. Doesn't quite line up with Karl saying a few though so let's go 2-3M in new ARR due to services definition. 

One, that implies poor (but positive) growth last quarter, although given COVID and the focus on giving free trials this isn't unexpected. 

Second, this means annual organic growth was in the range of 15-20%, which although much lower than the 111% organic growth from FY18 to FY19 is still good considering:

1. the focus on re-branding and consolidating product offering after 3 acquisitions while

2. reaching (potentially temporary) cash flow break-even. 

3. large N3 ARR churn which I argue wasn't "organic"

It is my opinion that organic growth will improve going forwards now that the integration of product offering is complete. It is also my opinion that the company will remain at or above break-even on an operating basis to avoid capraise but to also continue to invest in growth. I am planning on adding to my (non Strawman) position tomorrow as in the long run I think this company is comfortably worth more than 3x EV/ARR, with asymmetric downside and an inflection point as cost controls and organic growth continue to drive operating cash flow improvements

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#Industry/competitors
stale
Last edited 7 months ago

23 Oct 2020 LVT strengthens partnership with Microsoft and secures largest ever deal

Microsoft is now trained to cosell the Reach and Directory products, targeting businesses with over 1k employees. (note the risk / strength that over 50% of contracts are sourced through Microsoft) 

Largest ever Intranet deal secured in Q1, representing multi-year multi-million with US based apparel retailer with 40k employees and 15k seasonal workers, utilising Reach and Intranet products.

Note that in recent investor presentation, both Reach and Intranet products were said to have $3-4/m average cost. Given the scale of the deal, use $1-2/m. Assuming one of the two products is sold to each employee on average, and at 50% penetration and assuming seasonal workers pay for 2 mths, this is a 500-750k ARR deal. Just speculation of course, with penetration the most important variable

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#Legal proceedings
stale
Added 7 months ago

I must admit even as a long term holder I wasn't aware of this ongoing case involving Karl's brother Keith claiming he was unfairly put out of his ownership share in pre Livetiles company nSynergy (https://www.crn.com.au/news/founders-of-melbourne-microsoft-reseller-nsynergy-sued-in-battle-over-assets-490799)

I also don't understand why Livetiles as a company had to foot a portion of the bill, but am glad at least that the equivalent of half of the bill was footed by Karl and Peter through their substantial equity holdings (16 out of the 90 mill shares between them as plaintiff). 

Going forward, and given the EV of a company largely consists of the PV of future cash flows, this 8.4m decrease in cash for a 194m EV company all else equal would result in a 185.6m valuation (circa -4.5%). We will see what the market thinks ahead of next weeks quarterly update

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#Legal proceedings
stale
Added 7 months ago

21 Oct 20: 

Legal proceeding announced on 2 May 18 (shareholder dispute in respect of an unrelated company, involving LiveTiles CEO) and 1 Jun 18 (4 subsidiaries of the company have been added to proceedings in respect of companies unrelated to LiveTiles and involving the co-founders of LiveTiles) have been settled. 

LiveTiles will pay $8.445m to the plaintiffs, and LiveTile Co-Founders Karl Redenbach and Peter Nguyen-Brown will transfer a total of 16.28m shares (of which 11.93m shares will be subject to voluntary escrow conditions).

I don't understand if the companies were "unrelated" to LiveTiles, why does LiveTiles then have to pay out $8.445m. It seems that the shareholders are footing the bill for the co-founder's dispute.

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#Business Model/Strategy
stale
Last edited 8 months ago

Doing some comparables:

ARR Multiple / Organic Growth Rate

DTC 10 / 45%
BTH 14 / 30%
WSP 9 / 34%
LVT 3 / 22%
ELO 8 / 19%
SKO 14 / 16%

LVT is the clear outlier in valuation.

Consider LVT was previously valued at 12x ARR and lost -60% in share price since 2019.

So something has gone wrong despite 22% Organic Growth and 12x ARR.

I did some research and found that this year LVT had a change of ARR definition which now includes services revenue when it previously didn't.

Doing the sums from the accounts, my theory is if we took that away LVT may look more like:

4x / 0% Organic.

Which would make the table and share returns make a lot more sense.

Further information or discussion most welcome on this. 

 

 

 

 

 

 

 

 

 

 

 

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#Financials
stale
Added 9 months ago

27.08.20 announcement ASX

View Attachment

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#4Q20 Update
stale
Added 10 months ago

4Q20 4C Update:  I'm a bit surprised by the market's reaction to today's quarterly report.  

4Q20 Cash receipt $11.2m +42%; FY20 Cash Receipts $41.0m +109%.  Admittedly, the 4Q growth was less than the previous quarters.  

Operating cash flow was $6.44m.  However, takeaway the grant and tax income, the Free Cash flow (FCF) was -$1.3m.  However, this was a marked improvement on previous quarters.  for FY20 FCF  was -$27.5m. 

The cash balance is healthy at $37.8m.

For a company which grew Cash receipts at 109% in FY20, the EV/Cash Receipts of <5x seems low.  However, they will need to prove that the reduction in cash burn was not a one off.

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#ASX Announcements
stale
Added 10 months ago

ASX Announcement 29 July 2020 Positive cashflow and continued ARR growth in Q4

• LiveTiles generated positive quarterly operating cashflow for the first time in Q4FY20 (excluding both non-recurring income and expenses) of $1.2m

• Cash on hand grew by $4.0m during Q4 to $37.8m as at 30 June 2020 • Customer cash receipts of $11.2m, a third consecutive record quarter

• Annualised recurring revenue (ARR) has grown to $58.2m on a constant currency basis, up 45% in the last year and up 288% in 2 years

• Continued mixed operating conditions with lockdowns and economic uncertainty, offset by a continued robust pipeline and refreshed product portfolio. Strong medium & long-term outlook, with COVID playing a global role to accelerate digital workplace software adoption

 

 

 

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#ASX Announcements
stale
Added 10 months ago
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#Cashflowpositive
stale
Added 10 months ago

I'll start with what for me is the most important takeaway from today's (lack of) announcement - underlying cash flow positive for the month of June. This is an inflection point I've been waiting for a long time to see. The quarter should less surprisingly also be cash flow positive due to receival of government grants of circa $5m. My only concern now that the business is cash flow positive going forward is the impact on growth. 

Today's (lack of) ARR announcement can only be interpreted poorly - even if just in the case of sneaky reporting period changes. Adverse forex changes of circa -$4m ARR have clearly resulted in low to negative nominal growth in ARR for the quarter and as such the company has decided to merge ARR updates and 4c going forward.

the decrease in ARR and revenues will be offset by the decrease in costs due to forex so releasing simultaneously makes sense.

They could have just released it and made clear the constant currency change.. 

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#Bear Case
stale
Last edited 10 months ago

LiveTiles' current price does not seem to reflect the apparent new opportunity post-COVID. Perhaps they are not taking advantage of or adapting to the new landscape.

Given how many companies were forced into remote working situations faster than they would have liked, they might have surprised themselves with internal change agility which devalues LiveTiles' proposition as a managed solution.

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#Bull Case
stale
Last edited 11 months ago

LiveTiles continues to show promising ARR growth which does not seem to be represented in its current price. COVID's affect on large companies looking to facilitate better remote working should lend opportunity to this fast growing company.

The next company update should provide better insight into how their target market has responded to their proposition outside of an obviously shorter sales cycle. One to watch.

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#Bear Case
stale
Last edited 11 months ago

If this company specialises in software to allow companies to work from home, you would think a company like this should thrive in this environment, why have we not seen the growth? This should be their sweet spot with everyone working from home, yet it seems like they have not capitalised on it. Would this suggest clients don’t rate them as highly as other platforms? 

I like this business and agree with the bull cases already posted, and we may not see the growth until the next quarterly update, either way I think it's worthwhile to keep this in mind. 

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#Bull Case, Digital transformat
stale
Added 11 months ago

Livetiles has significant tailwinds.
1. Covid, WFH, Digital transformation:
In US, there has been a huge increase in the number of companies that have allowed their employees to work from home permanently. Optus has also recently announced that its customer service department has been allowed to work from home permanently. I think this trend will continue. Hence, there is a strong need for intelligent intranet software that allows employees working remotely to collaborate and access information easily especially for departments such as customer service. 
2. Shorter sales cycles:
With covid, companies are rushing towards digital transformation and making investments in intranets, collaboration/communication softwares like MS teams, slack etc. The managment also mentioned that it is seeing a drastic reduction in sales cycles. 
3. MS Teams, sharepoint, office 365: The microsoft partnership is a huge one. I think live tiles can ride on the Microsoft assets like MS Teams, office 365 etc.  The word "teams" was mentioned a number of times in the quarterly call and in the Q&A session. 
4. Recognition from Gartner and Forrester: There is increasing recognition of Live tiles products and capabilities by the industry. 9 out of the 14 new customers that were mentioned were global players. This is a really good sign. I think livetiles is getting bigger clients. 

 

I think the next quarter will be a surprise for the market. 

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#ASX Announcements
stale
Last edited one year ago

Research & Development Funding Update

 

LiveTiles Limited (ASX:LVT) (LiveTiles or the Company), the global leader in intranet software and AI & employee engagement products, is pleased to advise that it has today received $5.6m cash in relation to research & development tax refunds from the Australian Tax Office

View Attachment

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#Q3 Update: ARR up to $55.2m
stale
Last edited one year ago

Taken directly from the ASX annoucement posted this morning before trading opened. Full Announcement here: https://www.asx.com.au/asxpdf/20200414/pdf/44gxmq94pmxq4x.pdf

  • Annualised recurring revenue1 (ARR) reaches $55.2 million as at 31 March 2020, up from $52.7million as at 31 December 2019. ARR has grown 60% in the last year and is up 4.9x in 2 years
  • LiveTiles is well positioned during the current environment as the global leader in intranetsoftware and its applicability to remote working. LiveTiles is actively supporting over 1,000 recurring subscription customers to support remote employee communications, operating system access, collaboration and document sharing
  • Material cost reductions have been implemented in late March and early April, with the business well placed to operate with this reduced cost base from Q4
  • LiveTiles is well capitalised with over $33m cash on hand as at 31 March. The Company is accelerating its efforts to reach breakeven operating cash flow and is taking tangible steps to reach that point during calendar 2020
  • LiveTiles reconfirms it has no requirement to raise further capital to fund operating cash burn

Further notable information regarding cash burn:

One-off cost impacts, including FX impacts on US and European cost base, will see operating cash burn in the range of ~$9m for Q3, notwithstanding further growth in cash receipts. Material cost reductions have been implemented late in Q3 and early in Q4. Actions implemented and underway include:

  • Consolidation of office locations, with all remaining offices currently unoccupied and all employees successfully switching to remote working;
  • Lower travel and event marketing expenses due to COVID-19;
  • Reduction in external contractors and consultants;
  • Temporary reductions in hours and salaries across the global workforce, including 20% reductions for the Board and all senior leadership. These reductions will be in place for at least six months; and
  • Accelerated integration of CYCL and Wizdom. The Company is reviewing additional options to reduce cash burn, including short-term revenue and cost initiatives. The reduction in cash burn will commence in the June quarter, with the full benefit to be realised during the September quarter.

ASX:LVT was up 17% at time of writing.

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#ASX Announcements
stale
Added one year ago

18 February 2020

Wizdom achieves earn-out following strong ARR growth and positive EBITDA

  • Wizdom successfully meets earn-out conditions following strong annualised recurring revenue (ARR)growth and positive EBITDA
  • Wizdom’s market-leading intranet software has proven to be highly complementary to LiveTiles’ intelligent workplace platform and is driving strong enterprise customer growth
  • Integration successfully completedwith all key staff retained
  • Like Wizdom, LiveTiles’ first acquisition (Hyperfish) also successfully achieved itsearn-out following rapid ARR growth of 425% in FY19

...

LiveTiles acquired Wizdom, Europe’s leading intranet software business, in February 2019.Wizdom has achieved strong ARR growth of 87%in the 13 month period to 31 January 2020(from $8.0 million to $15.0million), whilst also generating positive EBITDA.

The Wizdom acquisition, together with the CYCL acquisition completed in December 2019, has also extended LiveTiles’ clear global leadership of the rapidly emerging intranet software market, which LiveTiles estimates to be a $13 billion per annum market opportunity.

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#Bull Case
stale
Added one year ago

Us Gov Approval Very Good For LVT  ? $ 1.50 Valuation  Is Getting Closer ,,,, 

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#ASX Announcements
stale
Added one year ago

3 February 2020

LiveTiles approved for Microsoft co-sell into US Government

  • LiveTiles receives highly sought after General Services Administration (GSA) approval within the U.S. Government and U.S. Department of Defense
  • GSA   approval   creates   new   commercial   opportunities   and   helps   to   accelerate   existing opportunities for LiveTiles with the U.S. government
  • As  an  approved  GSA  Vendor,  U.S.  governmental  agencies  will  be  able  to  quickly  purchase  LiveTiles technology and bypass a typically lengthy procurement process
  • GSA approval extends on approvals recently received from the Australian and UK Governments to accelerate purchasing processes within government
  • LiveTiles and its partners will immediately pursue joint opportunities with Microsoft across U.S. Government and U.S. Defense, including via the recently announced $14.6B AUD JEDI contract
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#Q2 2020 update
stale
Added one year ago

LiveTiles has reported another quarter of strong growth.

ARR has hit $52.7m, up 22% from the preceeding quarter and 130% over the past year.

Worth noting that close to half of this was acquired growth from the CYCL purchase.

Average copntract value also increased, but so did churn amongst smaller customers.

There was no detail on cash burn, though that will be released prior to the end of January when it posts its next 4C.

In terms of outlook, LiveTiles said only that it "expects to deliver another year of strong customer and revenue growth"

More detail here

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#Bull Case
stale
Added one year ago

LiveTiles core product is providing low code intranet for enterprises.

This company is currently trading as if it is medium growth for an ASX SaaS company (5x ARR) [~$236m market cap at 27.5 cents], whereas in reality, it is one of the fastest-growing SaaS companies on the ASX (100% CAGR) and is thus deserving of a 10x multiple [i.e. ~$500m market cap on ARR of ~$50m].

The company's base case of $100 million ARR by June 2021 would suggest a stock price of approx $1.00 by June 2021 [$860m market cap @ 8.6x ARR].

The downside case, involving a slower growth rate and a forced sale of the company suggests 23 cents by June 2020 [$200m market cap @4x ARR of $50m].

I have bought in at 24.5 cents on the 27th December 2019.

 

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#Overview
stale
Last edited one year ago

Some initial thoughts:

Develops intranets for corporates, which gives an employee "homepage" that integrates all business functions and intel in the one place

Targeting $100m in ARR by end of FY2021. It has been growing very stringly to date, in part driven by acquisitions.

Annual costs of ~$65m at present

$56m in cash as of last quarter, but operating cash burn was $5.2m in the same quarter (Sept 2019).

Appears to have some substantial counterparty risks; Microsoft partnership is the basis of their business.

Has a very large addressable market, and claims to be the market leader

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