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Why the Bigtincan share price is falling today

The Bigtincan Holdings Ltd (ASX: BTH) share price is down 2% to $0.47 in Wednesday morning trade after the sales enablement automation platform business released its quarterly report and Appendix 4C for the quarter ended 30 June 2019. 

What results did Bigtincan report yesterday?

The company reported annualised recurring revenue (ARR) of $23.4 million, representing a 52% increase over the prior corresponding period. Management noted year-on-year organic growth in ARR was 36%, which demonstrated the strength of the core platform. Growth in ARR was strong across all parts of Bigtincan’s business including content distribution, learning and coaching, and catalog based systems in key verticals such as Life Sciences, Manufacturing and Retail. 

During the quarter, Bigtincan continued its land and expand strategy that resulted in a number of key enterprise customer wins and expansions globally. These included Anheuser-Busch, Brookdale Senior Living and Sony Playstation

The company has also released new products during the quarter including the showcase of Bigtincan Genie voice assistant, and its FatStax acquisition has exceeded the top-tier of its earn-out performance target. 

Bigtincan reported cash receipts from customers of $5.5 million for the quarter, an increase of 119% over the prior corresponding period. The quarterly cash collection for the June 2019 quarter was the highest Bigtincan has reported to date. However, despite the strong increase in cash receipts, the company still reported an operating cash loss of around $1.4 million for the quarter. For the financial year to date, Bigtincan reported cash receipts from customers of $18.8 million and an operating cash loss of $8.2 million. 

At the end of June the company had $25.4 million in cash and cash equivalents after successfully completing a $15.6 million entitlement offer during the quarter, which will be used to fund key organic growth initiatives and M&A opportunities that meet its acquisition criteria. 

What’s the outlook for Bigtincan?

Bigtincan reaffirmed that it is on track to deliver in excess of 40% revenue growth in FY19 with retention rates expected to remain stable. Management also noted that the company is well positioned for further growth throughout FY20. The market’s focus will now turn towards the release of its FY19 result on 29 August and guidance for FY20.

Shares in Bigtincan are up 74% in 2019 and have been one of the best performing small-cap technology companies on the ASX, alongside Livetiles Ltd (ASX: LVT) and Volpara Health Technologies Ltd (ASX: VHT)

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Motley Fool contributor Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO and VOLPARA FPO NZ. 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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