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LiveTiles (ASX:LVT) - CEO & Co Founder, Karl Redenbach
CEO & Co Founder, Karl Redenbach
Source: Australia Unlimited
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  • LiveTiles (LVT) has had another solid quarter of annualised recurring revenue (ARR) growth which reached $55.2 million – a 60 per cent year on year growth
  • LiveTiles is an award-winning intranet software company offering a range of workplace solutions
  • During the quarter, the company added almost 40 customers with each customer bringing in over $51,000 in ARR
  • Due to COVID-19, LiveTiles and its co-sell partner Microsoft saw the Microsoft Teams platform exceed 44 million active daily users on March 18
  • Due to social distancing, working from home and remote learning, people are relying more on technology
  • LiveTiles generated customer cash receipts of $10.9 million – a 109 per cent increase on the prior corresponding period
  • At the end of the quarter, LiveTiles’ cash on hand sat at $33.8 million
  • It has since received nearly $9 million from COVID-19 funding packages and R&D tax incentives
  • LiveTiles is 7.14 per cent in the green with shares trading for 22.5 cents each

LiveTiles (LVT) has had another solid quarter of annualised recurring revenue (ARR) growth which reached $55.2 million – a year on year growth of 60 per cent.

The intranet software company states this achievement is despite the conclusion of its partnership with N3. N3 provided contracted sales and marketing services, particularly in the U.S., since March 2018.

LiveTiles hinted the fizzling partnership was due to significant growth in its business model in the last two years.

The decision has resulted in the one-off churn of roughly $4.4 million in ARR, representing the software license subscription announced along with the N3 partnership. To offset this loss, the company has already taken appropriate cost actions.

LiveTiles is a global, award-winning developer of workplace solutions which aim to significantly improve the employee experience. This involves Intelligent Workplace technology including Intranets, AI and Employee Chat-bots, Employee Mobile Apps, Employee Data capture and insight tools, and many other capabilities.

The company added 37 customers during the quarter and the average ARR per customer was about $51,500.

In September last year, LiveTiles partnered with Microsoft to co-sell LiveTiles’ products on the Microsoft Teams platform. Microsoft Teams is Microsoft’s collaborative platform, featuring functions for workplace chats, video meetings, file storage and application integration.

At the time, Teams had over 13 million active daily users and Microsoft it was the fastest-growing application in its history before COVID-19.

The crisis actually led to substantial growth. The number of Microsoft Teams video calls grew 1,000 per cent in March as a result of more digital workplace technology during COVID-19. Daily active users exceeded 44 million on March 18, up from 32 million exactly one week prior.

“Recent difficult events have thrown into sharp focus for customers the importance of cloud-based tools that can be accessed by all employees anywhere, such as intranets and collaboration software,” Co-Founder and CEO Karl Redenbach said.

LiveTiles is currently working with a number of global government and health organisations to implement relevant technologies, including Microsoft Teams, to support customers’ current operating challenges.

Consequently, COVID-19 has provided recurring revenue opportunities in the short term and supporting struggling companies will likely result in recurring revenue in the longer term.

Another win during the quarter was receiving General Services Administration (GSA) approval within the U.S. Government and Department of Defence. This means LiveTiles is now able to efficiently sell its products to U.S. government bodies.

Financials

LiveTiles generated customer cash receipts of $10.9 million in the quarter which is a 109 per cent increase on the prior corresponding period.

Net cash outflow from operating activities was $8.8 million in the quarter. Unfortunately, LiveTiles’ operating expenses of $19.4 million was above its guidance of $18.6 million but this was heavily due to movements in foreign currency exchange rates.

Nevertheless, the company expects operating cash costs and expenditure to improve next quarter as a result of cost reduction initiatives and ongoing growth.

At the end of the quarter, LiveTiles’ cash on hand sat at $33.8 million. In addition, this month has seen the company receive COVID-related funding packages of nearly $3 million in the U.S. and Switzerland.

As announced today, LiveTiles has received $5.6 million cash in relation to research & development (R&D) tax refunds from the Australian Tax Office. But, due to successful revenue growth, the company is now no longer eligible for further R&D tax incentive payments.

“We continue to deliver valuable growth on our substantial book of customers and recurring revenue, and we remain extremely positive in relation to the value our IP can create for customers in a post-COVID world,” Karl concluded.

LiveTiles is 7.14 per cent in the green with shares trading for 22.5 cents each at 12:21 pm AEST.

LVT by the numbers
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