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Why the Bigtincan (ASX:BTH) share price is sinking 7% lower today

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The Bigtincan Holdings Ltd (ASX: BTH) share price is sinking lower on Friday following the release of its first quarter update.

At the time of writing, the AI-powered sales enablement automation platform provider’s shares are down 7% to $1.23.

How did Bigtincan perform in the first quarter?

Bigtincan had a soft first quarter but delivered a result in line with its own expectations.

For the three months ended 30 September, the company recorded customer cash receipts of $4.5 million. This was down 15% on the prior corresponding period. It also included government grants of $0.5 million, up from $0.1 million a year earlier.

No explanation was given for the decline in cash receipts compared to the prior corresponding period. Furthermore, management advised that it saw no impact on payment terms from enterprise customers, nor did it have extended potential bad debt exposure.

Also rising compared to the prior corresponding period was Bigtincan’s cash costs. They came in at $11.5 million for the quarter, which was up over 35% from the first quarter of FY 2020.

Nevertheless, the company finished the period with a very strong balance sheet. Its cash and cash equivalents stood at $63 million at the end of September. Management believes this leaves it well-placed to execute its growth plans.


Bigtincan remains on track to meet the market guidance it provided with its FY 2020 full year results.

This is for annualised recurring revenue of $49 million to $53 million and revenue of $41 million to $44 million with stable retention.

In addition, management notes that the International Data Corporation (IDC) Worldwide Digital Transformation Spending Guide shows that the digital transformation of business practices, products, and organisations is predicted to continue at a solid pace. This is despite challenges presented by the COVID-19 pandemic.

It commented: “This focus on digitization and Bigtincan’s unique strength in mobility, provides the Company with opportunities for tailwinds going into FY21. Bigtincan’s ability to address counter-cyclical market sectors (life sciences, technology, telecommunications), was demonstrated over the past quarters, with new customers and expansions in Technology, Financial Services and Life Sciences.”

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Returns as of 6th October 2020

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO. 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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