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Trading update: Here’s why the Livetiles share price is up today

The Livetiles Ltd (ASX: LVT) share price is up 2% to 57 cents today after the software company that “empowers its users to create their own intelligent workplace experiences” today reported an operating cash loss of $7.76 million on revenue of $5.2 million for the quarter ending March 31 2019.

In total for the nine months ending March 31 2019 it has posted an operating cash loss of $28.4 million and had cash on hand of $21.1 million at the quarter end.

On the positive side it did report that annualised recurring revenue (ARR) more than tripled over the past year to $34.5 million, while the aforementioned quarterly operating cash loss was actually a 19% improvement on the loss booked in the prior quarter.

The group also has an ambitious ‘target’ of growing ARR to $100 million by June 30 2021.

Targets are all well and good, but it’s executing on them that counts and which way the Livetiles share price heads in the future will largely depend as much on its cost control as its top line growth.

The stock has generally been on a long-term upward trajectory over the past 5 years thanks to the recurring revenue growth, although considering the cash burn over the past 9 months is now greater than cash on hand investors might want to consider the possibility of a capital raising down the line.

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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