Today there were a few smiles on the faces of LVT holders with the share price soaring pass the 25c resistance level.
This signals the increasing interest in LiveTiles, a hyper-growth SaaS company that was recently awarded the title of Australia fastest growing technology company. However, I think this is only the very beginning.
Over the next 18 months, I believe that the path out of COVID will accelerate the mission of this company to the point where LVT break the coveted billion-dollar valuation threshold. This corresponds to a share price of circa $1.10 and is the threshold I am looking for to take some profits off the table. It is also a short term valuation target of the Founders.
In a recent podcast, Karl Redenbach (CEO, LiveTiles), made the call that COVID is the catalyst that will accelerate the trajectory of LiveTiles. Ultimately, at their core, LiveTiles helps organisations communicate and collaborate and this is more important now than ever before. Remarkably, management has stated that this black swan event has actually led them to bring forward their 3-5 year plans and ambitions.
Key Quotes from the CEO:
"I've never felt more energised in my life. There are going to be really big changes that happen in society now and most of these changes will end up being positive, particularly for us."
"The great news is that of all of the business leaders we are speaking to, 90% are using COVID as a catalyst for technological change. I've never felt this invigorated in 20 years of business"
"We have worked on a bunch of COVID-19 related projects in the last 6 weeks, including helping Tasmania Health move 14,000 health workers onto Microsoft Teams and video conferencing."
"We have helped out a large firm in New Jersey (Health Network) with our AI Bots product, which was able to help ease the load on a call centre. We've worked with Flinders Uni to help bring their data and dashboards together to track what is happening with the virus."
"We've been working with the Microsoft Teams' Team in Seattle for 4 years, since the pre-alpha version. What we are doing is allowing people to work in this technology, by bringing the intranet to you and to bringing applications to you, wherever you may be."
"We have a new LiveTiles product (LiveTiles Everywhere) which can follow you wherever you go. It doesn't even have to be in teams. You can access it in Slack for example. When you are working from home you will be using these types of digital collaboration technologies more than ever has been used before"
"From our perspective, our relationship with Microsoft has never been stronger."
"We have consolidated our product and marketing teams (19 offices) into core groups, where we are focused on our sets of products (intranet products, data & AI products and new experiences [e.g. LiveTiles Everywhere])"
"We think there is going to be a big tailwind post COVID19 for us. From our perspective, we have never been busier. Some of the old workplaces and intranets that we have updated have been 1990s built. We have been banging on about this message for the last 5 years and it is only now that many corporates are starting to have the lightbulb moment"
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So, quotes aside from a charismatic leader and Co-Founder, we stand at a pivotal moment in the history of LiveTiles. Cashflow breakeven is less than 6 months away, which will be a big catalyst for the share price as it allows LiveTiles to become masters of their own destiny. LiveTiles are also closer than ever to the $100m ARR mark and "feel so close that we can reach out and touch it".
The company has moved from strength to strength in a mere 4.5 years of existence. LiveTiles is stronger as a business than it has ever been with $55m in annualised recurring revenue and a very strong balance sheet. They have over 1000 subscription customers who include some of the biggest businesses on Earth. This is a company that stands at the convergence of some of the hottest emerging trends in tech right now including remote working, intelligent workplaces and artificial intelligence.
Longer-term, $1.10 may only be the beginning if one is willing to be patient. Karl & Peter have previously stated that they wish to become a billionaire via LiveTiles. Given that they each have a ~10% share in the company, to become a billionaire, LiveTiles would need to reach a $10b valuation, which would be a $11 share price (on current SOI).
Having met them, I think they can do it. They are friends with Scott and Mike from Atlassian who rank in the top 5 richest Australians and operate in the same enterprise technology landscape. They have mentors in the space. They see a clear path forward. Karl & Peter may very well end up being Australia's next tech billionaires across the next decade.
Now is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.
Good luck all & enjoy the ride -- I'm excited to be sharing it with you,
(20min delay)