LiveTiles (LVT) Reports First Quarter Results – Time To Buy?

October 11, 2019

Max Wagner

Max is a Rask writer/analyst based in Queensland. He covers Australian Exchange-Traded Funds (ETFs), managed funds and personal finance for Rask Media, Best ETFs Australia and our premium membership service, Rask ETFs. Max holds a Bachelor of Business (Finance, International Business) from QUT. Max is passionate about financial education and believes that everybody should learn how to invest and manage their money from a young age.

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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?

About LiveTiles

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 30^th September 2019, up from $40.1 million at 30^th 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 30^th 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 30^th 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.

I’d rather invest in the growth businesses in the free report below.

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Disclosure: At the time of writing, Max does not have a financial interest in any of the companies mentioned.

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