In morning trade the LiveTiles Ltd (ASX: LVT) share price is on course to have a strong finish to the week.
The software company's shares are currently up almost 4% to 47.2 cents. At one stage they were up as much as 8% to 49.2 cents.
Why are LiveTiles' shares surging higher today?
This morning LiveTiles released its update for the September quarter and revealed further growth in its annualised recurring revenues (ARR).
According to the release, LiveTiles saw its ARR reach $18.6 million by the end of the quarter, representing annual growth of 272% and quarter-on-quarter growth of 24%.
This means that LiveTiles is growing 5.8 times the rate of the software-as-a-service industry, though admittedly from a much lower base.
A key driver of this growth has been the appointment of N3 as its sales and marketing force. Management advised that the N3 team has been generating high and consistent volumes of leads and sales opportunities across the United States. This led to several new customers being secured from the N3 channel during the quarter.
Although the company has not provided names. Customers added during the quarter included one of the world's leading entertainment companies, a US-based supermarket chain, a major Asia-Pacific airline, and a major Australian government-owned corporation.
LiveTiles co-founder and chief executive officer, Karl Redenbach, appeared to be very pleased with the quarter.
He said: "We are pleased to deliver another strong quarter of customer and ARR growth, together with continued growing awareness globally of LiveTiles' brand and offering. The N3 sales and marketing channel is performing well, delivering a high volume of leads and a strong sales pipeline, which we remain focussed on converting into new customers."
Before adding that: "Our partnership with Microsoft is stronger than ever, with our high-impact co-marketing activities continuing to strengthen awareness of our brand and offering and expected to continue to drive new customer and revenue growth in FY19."
Should you invest?
I've been very impressed with the progress that LiveTiles has made over the last 12 months and was pleased to see this momentum continue in the September quarter.
While I'm not ready to invest just yet, its shares are close to the top of my watchlist.
In the meantime, I think fellow small cap tech shares Citadel Group Ltd (ASX: CGL) and Megaport Ltd (ASX: MP1) are in the buy zone.
