The share price of sales enablement platform company Bigtincan Holdings Ltd (ASX: BTH) has risen 19% to 31.5 cents in Tuesday trade following the release of an announcement that it has won a record contract expansion.
Record contract expansion
Bigtincan announced this morning that it has won an additional $7.2 million of recurring revenue over 3 years from its existing agreement with T-Mobile. The contract expansion will take the total contract value to $11.5 million since it was initially won in August 2017.
The initial contract was won by a competitive tender process that resulted in the deployment of the Bigtincan Hub application to 5,500 retail stores and on up to 23,000 mobile devices.
The contract expansion will widen Bigtincan's use case within T-Mobile beyond the retail segment to include business to business sales and other groups. Furthermore, the expansion will allow for the the extended use of the Bigtincan Hub Platform as a core platform for T-Mobile's business.
Foolish takeaway
Bigtincan is a Software as a Service (SaaS) business that provides sales enablement automation software. The company uses AI to predict customer requirements and what information is most relevant to them and the user's sales personnel with the aim of boosting sales win rates through quicker learning and smarter selling.
Companies in the SaaS space can become quite lucrative for shareholders once they achieve a particular level of scale with notable winners such WiseTech Global Ltd (ASX: WTC) and XERO FPO (ASX: XRO) demonstrating the potential for large gains.
In FY18, Bigtincan reported a net loss of $6.6 million despite a 42% increase in trading revenue to $13.1 million. Annual recurring revenue was up 41% to $15.4 million in FY18 and the company had $18.5 million in cash at the end of October.
The share price has come under selling pressure over the last couple of months due to the bearishness in global equity markets and reached a 52-week low of 24.5 cents in late December.
With reporting season only a month away, Bigtincan remains one of the more interesting small cap technology companies to monitor on the Australian market alongside ELMO Software Ltd (ASX: ELO) and Livetiles Ltd (ASX: LVT).
