Bigtincan Holdings Ltd - Growing Towards Profitability

Equity Bottom-Up

804 Views11 Mar 2022 08:00

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SUMMARY

Bigtincan Holdings Ltd

Growing towards profitability

Bigtincan Holdings Limited (ASX:BTH) was founded in 2011 in Sydney, Australia and is now headquartered in Boston, Massachusetts, USA. BTH is a global SaaS provider of sales-enablement software which listed on the ASX in 2017, the year it surpassed 200 customers. BTH’s core product is an automation platform that is AI-driven and gives sales and marketing teams a series of tools to enhance the sales process, including sales execution, training and customer service. The BTH platform has three hubs, the Learning Hub, the Content Hub and the Engagement Hub, which support sales teams. BTH has over 2,000 customer deployments and more than one million users. BTH is currently in a growth phase, expanding its offerings and customers both organically and via strategic M&A. BTH has recently acquired Brainshark and has had its first full quarter which includes the Brainshark operating payments, leading to revenue of $45.9m for H1 FY22 (growth of 142% from H1 FY21). BTH has also recently announced Bigtincan for Salesforce, a new module for its Content and Learning Hubs. The module brings AI-powered content recommendations to users in the Salesforce.com Sales Cloud and Service Cloud (ASX release 11-Jan-22). BTH had cash and equivalents of $49.9m as at 31-Dec-21, and raised $136.5m during the half via a placement and institutional entitlement offer, which was completed on 10-Sept-21.

Business model

BTH has three objectives - to create the buying experience of the future; to empower sellers; and to engage customers - which it delivers via its “Bigtincan Hub”, a software platform consisting of three modules including learning, content and engagement. BTH has been growing organically and via acquisition in an addressable market of $10b+, and its growth strategy has led to a 75% life-time value (LTV) CAGR from 1HFY19-1HFY22. BTH has an established business in North America and conducts business globally. BTH has diversified its recurring revenue base across verticals including life sciences, tech, retail, telecommunications, financial and manufacturing plus others. BTH’s outlook for FY22 includes growth through winning new customers and upselling existing customers, investments in technology to support growth in digital and mobility, and targeted strategic M&A.

H1 FY22 ARR growth of $63.6m to $112m (132%) vs pcp

BTH had quarterly customer cash receipts of $26.3m in Q2 FY22, an increase of 150% from Q2 FY21, which was in line with forecasts. BTH received the first full quarter of operating payments for Brainshark and associated Brainshark integration investments following its acquisition completed in Sept-21. BTH held $49.9m in cash and equivalents as at 31-Dec-21. BTH confirmed guidance for FY22 in its half year report to achieve or exceed $119m in ARR and $109m in revenues for FY22. BTH had positive adjusted EBITDA of $1.2m in 1H FY22 and achieved a gross margin of 86%. During the half, BTH also raised $136.5m as part of the acquisition of Brainshark Inc which was completed on 8-Sept-21.

ASX SaaS tech stocks – a diverse group incorporating AI

BTH focusses on sales enablement across a range of industries, compared with solutions for HR teams like ELMO (ASX: ELO) or a focus on communications with Whispir (ASX:WSP). The smaller LiveTiles (ASX:LVY) is an intranet designed to boost employee engagement and productivity. The comparables are all global SaaS providers and use automation technologies that address different markets and problem sets. BTH focusses on enabling customer-facing teams to improve the buying experience for customers and has clients including Nike, Guess, Prudential and Starwood Hotels.

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