NAF, I was about to criticise you but when I look at the figures you're kind of right. ARR now is $53.8m (none of this "constant currency" BS, that is the figure) and was $40.1m this time last year. However, they got $4.7m ARR via the CYCL acquisition so that's only $9m in organic ARR growth over four quarters, ie average of only $2.25m per quarter. Obviously Covid has had a massive impact in the last quarter, notwithstanding that the three previous quarters were clearly not great. And with the reclassification of ARR just completed it is likely that some of CYCL's previous non-ARR revenue has been reclassified as ARR which makes these figures in terms of organic ARR growth even worse! I'm still a big believer but it's really not surprising where the share price is in light of the above. I'm staying the course but am getting pretty frustrated with this company. With the massive global opportunity in front of them I just can't understand why the ARR growth hasn't been a lot better (ignoring the last quarter obviously). Frankly they should be very close to $100m ARR already IMO and instead it's looking like it will be at least another two years. The ARR growth needs to accelerate dramatically next calendar year - enough of the excuses and references to a "strong pipeline" - delivery is all that matters. The latest from Citi is below FWIW:
4Q19: Collections Were a Highlight, More Capital Needed
Momentum Continues, Reiterate Buy (1H) — With LVT having previously
announced that its 4Q19 Annualised Recurring Revenue (“ARR”) grew +167% vs.
pcp to $40.1m, all eyes were on the cashflow which was pleasing (see below). In
light of today’s (30 Jul) disclosures, we lower our FY19 ARR by -4% but slightly
increase FY21e ARR by +1% and we lower our FY20e-FY21e EBITDA by -$1m to -
$2m to reflect a more conservative cost base. Our target price, however, increases
+12% as the expansion of the high growth peer set EV/Sales multiple outpaces our
downgrades.
Key Insights —
– Customer Cash Receipts were stronger than we expected at $7.9m (Citi: $7.3m)
which represented the first full 3 month contribution from Wizdom.
– Net Operating Cashflow of -$6.2m (Citi: -$5.2m) was down -20% vs. 3Q19 but
was largely flat vs 3Q19 excluding the $1.4m NY State payment. We note the
4Q19 figure of $6m was largely inline (-2%) with the pcp. Also of interest, was
staff costs of $7.1m being the same as the pcp notwithstanding the Wizdom
acquisition, and was actually -2% vs. the pcp.
– Average ARR per Customer, after flat-lining in 3Q19 due to the Wizdom
acquisition, pleasingly expanded to ~$44k, implying larger customer wins
– The Number of Transacting Partners grew strongly, +24% vs. 3Q19 and +89%
vs. the pcp, reflecting broad growth across the group.
– Cash Burn for 1Q20e is forecast to be $15.9m (Citi: $16.0m). With $14.8m in
cash at the end of FY19 and our forecast of 1H20 cash outflows of ~$12.3m,
LiveTiles is likely to raise capital sometime in 1H20e.
We Remain Confident in the Outlook — We continue to expect FY20e to be a
seminal year for LVT with the N3 sales force hitting full momentum, an incremental
7.5 month contribution from the Wizdom acquisition, Hyperfish increasing its
prominence with the group and the ‘lumpy’ Bots offering also a contributor to
growth.
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