Ann: Hyperfish recurring revenue up 425% since acquisition, page-42

Someone asked for my view.

it’s useful to hear that Hyperfish is getting traction and has strong momentum. LVT is required to announce the performance target has been met due to the issue of shares as consideration.

The more important announcement will be Q4 ASR and an overall business update, including product segments if relevant. It sounds like LVT is selling more product bundles.

We believe the underlying business continues to grow at a good pace. We suspect that LiveTiles Design remains the anchor product, followed by Bots, followed by Hyperfish but that product bundles supported by LiveTiles Intelligence are an increasingly important sales proposition going forward. It offers compelling value to the customer.

As as an aside, we like that LVT is one of the few enterprise software offerings that not only provides additional functionality but also immediately saves the customer money. Over the next 24 months we think that CTOs will be told by their CEOs to “reduce cost” . Thematically investors will look for products and companies that do that.

We note that LVT has passed the inflection point of cash burn.More importantly COA , cost of acquisition continues to improve (decline) and cash burn per dollar of revenue is falling in a strong trend. We believe we will be able to tell at the next C4 if the operating business is profitable. Revenues - Non Marketing Expenses. HOWEVER we do not agree with those of you on this forum who argue that the company should throttle back on growth, hold Marketing spend + R&D constant and focus on cash flow break even. This is a growth story! The value argument is simple. The company forecasts $100m ASR by 2021. A growth SAAS company of that size will sell at 10x ASR. A high growth SAAS company can command as much as 15x. Take the conservative 10x, that’s $1bn. If I allow them to burn another $75m of cash burn to get there , it is still a multi bagger. Don’t read anything into the $75 m number, it is merely illustrative. This is a small company growing very rapidly