The Australian ASX tech sector is smaller and less mature than the much larger US tech market. However, the number of ASX tech shares listed continues to grow each year.
Two ASX tech shares have caught my eye lately: Carsales.Com Ltd (ASX: CAR) and Bigtincan Holdings Ltd (ASX: BTH). Here's why I think both could be good buy and hold options for your ASX share portfolio right now.
Carsales.Com
Carsales has held a dominant market position in the Australian online automotive classifieds market for well over a decade now. Local revenue growth has slowed down due to maturity of the online channel. However, local growth has still been solid and consistent in recent years. Growth is now being particularly driven from Carsales' overseas operations, which includes South Korea and Brazil.
Although coronavirus impacted Carsales in the early phase of the pandemic, the company share price has rebounded strongly in recent months.
Carsales reported in June that Australia's lead and traffic volumes had continued to improve despite the challenges of the pandemic. However, at the time total revenue for FY 2020 was predicted to be flat.
Carsales may continue to face short-term challenges due to the pandemic. But I believe its expanding overseas operations will drive strong growth in the longer term.
Bigtincan
Another good ASX tech share to buy and hold for the long-term is Bigtincan. This small cap technology company operates in a fast-growing IT software niche called 'sales enablement'.
Like Carsales, the Bigtincan share price took a hit early on in the pandemic. However, it has witnessed strong share price gains in recent months.
Bigtincan reported a strong fourth quarter in which customer cash receipts surged by 89% to $10.4 million. Annualised Recurring Revenue (ARR) year-on-year growth for Bigtincan lifted by 53% to $35.8 million. Bigtincan's ARR has now grown at a very impressive compound annual growth rate of 50% over the past 5 financial years.
I should point out that Bigtincan has yet to reach the breakeven point in terms of profitability, so it could be perceived as a risky investment right now. However, I believe the company will be profitable in coming years as it achieves further market scale.
Foolish Takeaway
Carsales and Bigtincan are 2 ASX tech shares that I believe are well-placed to outperform the ASX over the next five years.
