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The Bigtincan (ASX:BTH) share price has dropped 35% in 3 months

business man wearing box on his head with a sad, crying face on it representing bad investment in asx shares and fall in asx share price
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After soaring to a 52-week high of $1.60 in late October, shares in ASX junior software company Bigtincan Holdings Ltd (ASX: BTH) have fallen more than 35% to just $1.01 as at the time of writing. The Bigtincan share price decline has continued despite the company making a number of strategic acquisitions over the last few months.

Bigtincan was just one on a list of up-and-coming ASX technology companies that saw their share prices surge to new highs during the lockdowns last year. Shares in cloud network company Megaport Ltd (ASX: MP1), communications platform developer Whispir Ltd (ASX: WSP) and document workflow management company Nitro Software Ltd (ASX: NTO) all raced higher in 2020, but have also since come off the boil.

What drove the Bigtincan share price increase in 2020?

Despite the challenges posed by COVID-19, Bigtincan’s results for FY20 were strong across just about all financial metrics. Revenues increased 56% year on year to $31 million, with organic growth of 38% coming in at the top of the company’s guidance range. Bigtincan also ended the year with a strong balance sheet, with $71 million in cash and equivalents, thanks mostly to two successful capital raisings conducted during the year.

The company also made three key acquisitions during FY20, the most in its history.

What does Bigtincan do?

Bigtincan develops software to help streamline and automate its business clients’ sales and marketing functions. The company’s flagship sales enablement automation platform is a centralised, integrated software solution that is designed to support businesses throughout their entire sales and marketing lifecycle, from onboarding and training new staff, to engaging new customers and providing accurate reporting.

More recent news from the company

Bigtincan has kept up the mergers and acquisitions (M&A) activity in FY21. In October, it announced the acquisition of Danish digital sales enablement company Agnitio. Then, in December, Bigtincan announced it had also acquired US-based sales engagement technology company ClearSlide. And, just last week, Bigtincan revealed it had bought United States voice analytics company VoiceVibes.

The company also announced a significant contract win in November. It entered into a 3-year contract valued at approximately $1 million with US-based global financial services firm John Hancock Investors Trust.   

Outlook for FY21

Despite the flurry of M&A activity, Bigtincan has so far had a mixed start to FY21. Total operating cash payments were down 7% versus the prior quarter to $11.5 million, but the company did state that the September quarter is generally seasonally lower due to slowdowns in the US market over summer. Bigtincan did still manage to notch up some significant contract wins in the quarter, including a $1.8 million deal with Red Bull.

Bigtincan stated it was on track to meet its previous guidance for FY21, which was for annual revenue growth of between 32% and 42% to between $41 million and $44 million.

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Rhys Brock owns shares of BIGTINCAN FPO, MEGAPORT FPO, Nitro Software Limited, and Whispir Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO, MEGAPORT FPO, and Whispir Ltd. The Motley Fool Australia has recommended BIGTINCAN FPO, MEGAPORT FPO, Nitro Software Limited, and Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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