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Can LiveTiles hit $100m in annualised recurring revenue by FY 21?

Livetiles Ltd (ASX: LVT) shares have gone backwards over the past year to 35 cents today, but the intranet platform is sticking to aggressive guidance for it to deliver $1oo million in annualised recurring revenue (ARR) by June 30, 2021.

This morning the New York-based group reported ARR had climbed 131% year-on-year to $42.9 million as at September 30, 2019.

Its recent deal to buy Wizdom a rival junior intranet platform contributed another $8.2 million in ARR over the quarter with the group reporting it’s performing well as it looks to integrate, bundle, and cross sell the two businesses. 

The LiveTiles share price hit as high as 61 cents earlier in 2019 on the back of some wild enthusiasm over the start-up’s potential, including the news that it’s a core Microsoft partner.

However, ballooning expenses have been its Achilles heel after it posted a loss of $42.8 million on sales revenue of just $18 million over the fiscal year ending June 30, 2019. 

If I were a LiveTiles investor then I’d be keen to see some greater cost discipline and evidence the revenue growth can be generated on a sustainable basis.

Other junior tech businesses you might want to keep an eye on include Serko Ltd (ASX: SKO) or Alcidion Ltd (ASX: ALC).

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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Microsoft. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd and Serko Ltd and has the following options: long January 2021 $85 calls on Microsoft. The Motley Fool Australia has recommended Alcidion Group Ltd, LIVETILES FPO, and Serko Ltd. 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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