The LiveTiles Ltd (ASX: LVT) share price is rocketing in mid-afternoon trade. This comes after the company announced it has signed a record multi-million deal with a Fortune 100 company. At the time of writing, the LiveTiles share price is up an astonishing 16% to 30 cents.
What's driving the LiveTiles share price higher?
The LiveTiles share price is one of the best performers today after reporting a significant contract win.
According to its release, LiveTiles entered a three-year multi-million agreement with a United States-based Fortune 100 healthcare company. The deal, effective immediately, will see LiveTiles deliver its broad suite of products including its mobile communications application, LiveTiles Reach.
The company credited this to its established products, compared to custom-built platforms. This is because it is readily available to assist in employee collaboration and communication.
LiveTiles revealed that the contract was closed much quicker than the average sales cycle for enterprise deals. A catalyst for this could be that the healthcare system is overwhelmed by COVID-19. Particularly in terms of patient volume, risk management, and work-from-home for non-essential staff.
This is the second major win in recent months for the company. Previously, LiveTiles secured a record licensing deal with a United States-based apparel retailer. The multi-year, multi-million contract was signed to support the high-profile global apparel retailer with its COVID-19 re-opening strategy.
Growth market
Since the beginning of 2021, LiveTiles has witnessed strong tailwinds as a result of the digital transition from Senior Executives. It noted that companies are buying software packages to enhance their employee experience platforms. In turn, it is hoped that this will drive business growth. Notably, it is estimated that the market for solutions that promote corporate culture, knowledge discovery, and on-the-job learning is around US$300 billion per annum.
In the announcement, Gartner, a leading technology researcher, stated that global healthcare IT spending is forecasted to recover this year. By 2024, the sector alone is projected to reach US$169.5 billion.
Furthermore, enterprise software is anticipated to lead the rebound in IT spending in 2021. An annual growth is predicted at 8.8% to US$505 billion.
What did management say?
LiveTiles Co-founder and CEO Karl Redenbach welcomed the milestone contract, saying:
To sign another record deal for the second time in less than four months is a real thrill. To do so with LiveTiles Reach being a key part of the deal, is further validation of our product diversification strategy and gives us confidence for the year ahead. It's also further validation of the growing Employee Experience Platform product category that LiveTiles has helped pioneer.
LiveTiles president Daniel Diefendorf went on to add:
Digital Transformation and employee experience in a post COVID-19 world is no longer a nice to have. Large enterprises are making the necessary investments to help their teams be more effective, but also connect in meaningful ways with their employees no matter where they work from. This win brings together the best of a forward-looking customer and the LiveTiles' Employee Experience Platform to serve hundreds of thousands of employees.
Despite today's meteoric rise, the LiveTiles share price is down 14% over the last 12 months.
Based on the current share price, the company commands a market capitalisation of around $261 million.
