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Why the Bigtincan (ASX:BTH) share price charged 4% higher today

woman throwing arms up in celebration whilst looking at asx share price rise on laptop computer
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The Bigtincan Holdings Ltd (ASX: BTH) share price has been a positive performer on Wednesday.

In morning trade the artificial intelligence-powered sales enablement automation platform provider’s shares climbed as much as 4% to $1.27.

Why is the Bigtincan share price climbing higher today?

Investors have been buying the company’s shares following the release of a presentation ahead of its virtual annual general meeting.

That presentation included a summary of its performance in FY 2020 and its expectations for the current financial year.

In FY 2020, management notes that the company delivered new technology releases, new market offerings, new partnerships, and new acquisitions. Combined with the ongoing strong fundamental unit economics of its business, together with increased system utilisation, the company had its strongest year on record.

It reported a 53% increase in annualised recurring revenue (ARR) to $35.8 million. This was driven by the benefits of acquisitions and a 38% increase in organic revenue growth.

At the end of the period, Bigtincan had a retention rate of 89% and a life time value (LTV) of $270 million.

FY 2021 expectations.

Since the end of the last financial year, the company has acquired Denmark-based Agnitio A/S and partnered with Microsoft for remote selling.

Together with organic growth, this is expected to lead to Bigtincan recording ARR in the range of $49 million to $53 million in FY 2021. This represents a 37% to 48% increase year on year. Management is also targeting stable retention for the 12 months.

Its organic ARR growth is expected to be driven by new customer wins, upselling to existing customers, and investments in its technology to support growth in digital and mobility.

Finally, this ARR growth could be given an additional boost in the coming months. Management also revealed that it is still on the lookout for further strategic merger and acquisition opportunities that bring forward its roadmap and take advantage of current market conditions.

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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. owns shares of and recommends BIGTINCAN FPO. The Motley Fool Australia 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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