Software business LiveTiles Ltd (ASX: LVT) has released its annualised recurring revenue (ARR) to the end of June 2019.

LiveTiles is a software business which is headquartered in New York with operations in the US, Europe and Australia. LiveTiles provides workplace software for the commercial, government and education markets, and is an award-winning Microsoft partner.

LiveTiles’ June 2019 Quarter

LiveTiles revealed that its ARR had grown by 16.2% over the quarter to $40.1 million, up from $34.5 million at 31 March 2019. Its ARR has grown by an impressive 167% over the past year from $15 million.

The software business said that the ARR for the fourth quarter of FY19 was a record with growth of $5.6 million, which was 65% higher than the organic growth in the fourth quarter in FY18 of $3.4 million.

Management also said that the acquired businesses are performing well with strong cross-selling and bundling potential in FY20 and beyond. Hyperfish’s recurring revenue up 425% since the acquisition with the earn-out achieved.

Some of the customers that LiveTiles won during the quarter were an American global consumer lifestyle company, a European-based international recruitment agency, a major Australian university, an American-based international film studio, an Asian global professional services firm, a global European pharmaceutical company and a global technology & manufacturing business.

During the quarter the company also launched an AI-enabled intelligent search platform with Search365. It partnered with Microsoft on the global launch of “home sites”, along with global pharmaceutical company Novartis – a new Wizdom customer. LiveTiles also delivered an AI-enabled Office 365 security solution and it also launched LiveSmiles with Microsoft Australia as a foundation customer.

Cashflow And Outlook

Many investors will be looking to the company’s cashflow. The company said it delivered record customer cash receipts and that net operating cash flow “continued to improve”. These types of software businesses take a bit of time to reach neutral cashflow but then a lot of the new cash receipts adds to positive operating cashflow.

LiveTiles also received a $1.4 million in funding from New York State in relation to its Rochester operations.

The company is looking to organically reach ARR of at least $100 million by 30 June 2021 and the company said it’s “well positioned to achieve this”.

This is another impressive quarter of growth from LiveTiles and I certainly think it’s one to watch, but I’m hoping it can improve its cashflow position significantly over the next six months as its growth ramps up – the idea of a software business is to have a relatively fixed level of expenses.

I think LiveTiles is one to keep an eye on, along with the two rapidly growing businesses in the free report below as well.


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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.