Which 3 ASX tech shares are investing in long-term growth?

Technology shares are outperforming in the wake of Covid-19. Here are 3 overlooked ASX tech shares that focus on long-term growth.

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ASX tech shares are outperforming the broader market in the wake of the coronavirus pandemic.

The S&P/ASX All Technology Index (ASX: XTX) is up 94% from its March low while the S&P/ASX 200 (ASX: XJO) has climbed 32% in comparison.

Investors seeking long-term growth often look to technology shares that invest in their own growth. Here are 3 overlooked ASX tech shares that are focused on growth for the long-term. 

ELMO Software Ltd (ASX: ELO)

Elmo Software offers cloud-based people management software which covers hiring, recruitment, on-boarding, performance, and learning.

Despite the impacts of COVID-19, Elmo Software grew annualised recurring revenue by 19.7% in FY20, driven primarily by organic growth from new and existing customers. CEO Danny Lessem said businesses increasingly recognised the benefits of cloud-based technologies to deliver workplace solutions. 

Elmo's customer base grew to 1,682 organisations over FY20, an increase of 25.4%. Customer concentration remains low, with the largest customer representing less than 2% of annual recurring revenue. Elmo closed the financial year with a cash balance of $139.9 million, meaning it remains well-capitalised to continue to invest in both organic growth and strategic acquisitions. 

Nearmap Ltd (ASX: NEA

Nearmap provides high-resolution aerial imagery as a subscription service. This is used by a broad range of customers including governments, urban planning authorities, construction and engineering projects, and utilities providers. 

Nearmap will announce its full year results on 19 August, but in May advised that annualised contract value had exceeded $102 million. Although trading conditions became more difficult with the onset of COVID-19, Nearmap continued to grow its portfolio month-on-month across key industry segments. 

Nearmap implemented a number of cash management initiatives in April to preserve cash and strengthen the balance sheet without the need for additional capital. These initiatives mean Nearmap is on track to be cash-flow break even by the end of FY20. The company has also launched its latest product, Nearmap AI, which will allow it to penetrate more deeply into the large and expanding location intelligence market. 

Livetiles Ltd (ASX: LVT)

Livetiles supplies tools to corporate intranets and employee portals. Its technologies extend underlying Microsoft platforms such as Office365, adding enhancements which address common business needs and priorities.

The coronavirus pandemic has accelerated digital workplace software adoption, meaning solutions like those offered by Livetiles are becoming a "must have". 

Livetiles now boasts over 1000 recurring customers across every industry vertical. The company is seeing strong growth in annualised recurring revenue, which grew to $53.8 million at 30 June 2020, a 34% increase year-on year.

Livetiles has a large and rapidly growing addressable market which it believes provides a $15 billion market opportunity. With digital workplace software adoption accelerating, the company has a strong medium to long-term outlook.

Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of LIVETILES FPO and Nearmap Ltd. The Motley Fool Australia has recommended Elmo Software, LIVETILES FPO, and Nearmap 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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