Livetiles Ltd (ASX: LVT) has announced the results for Q1 FY20. Could it be enough to turn the falling share price around, or will the troubles continue?
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.
First Quarter Growth
LiveTiles announced this morning that annualised recurring revenue (ARR) reached $42.9 million at 30th September 2019, up from $40.1 million at 30th June 2019. This represents growth of 131% over the last year, but only 6.98% over the quarter.
Annualised, this would suggest growth of only around 27.9% in FY20, a long way from the 167% growth in FY19. While this isn’t exactly an accurate estimate, it highlights just how slow the growth actually appears to be in the most recent quarter.
It is especially concerning because LiveTiles requires an annual growth rate of 62% to achieve its goal of $100 million ARR by 30th June 2021.
LiveTiles said strong APAC region performance was offset by seasonal buying patterns in the US and Europe during the quarter.
LiveTiles also reported that it was another record quarter for customer cash receipts, although the actual figure was not detailed. The announcement stated that underlying cash operating expenditure in Q1 was higher than expected, but no specific figures were given for those costs either.
Further details will be available later this month when the company releases its Appendix 4C announcement.
Time To Buy?
The annual growth to 30th September 2019 of 131% is impressive, but it’s important to look at how the company has performed more recently. While it’s only one quarter, ARR growth appears to have dramatically slowed.
The LiveTiles share price is down almost 35% over the last six months and I can’t see this being the announcement that’s going to turn that performance around. For that reason, I’m not looking to buy at today’s prices.
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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).
Disclosure: At the time of writing, Max does not have a financial interest in any of the companies mentioned.