Why the Bigtincan (ASX:BTH) share price is tumbling lower today

The Bigtincan Holdings Ltd (ASX:BTH) share price is under pressure on Friday following the release of its third quarter update…

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The Bigtincan Holdings Ltd (ASX: BTH) share price is under pressure on Friday.

In morning trade, the sales enablement automation platform provider’s shares are down 5% to 94.5 cents.

Why is the Bigtincan share price under pressure?

Investors have been selling Bigtincan’s shares this morning following the release of its third quarter update.

For the three months ended 31 March, the company reported cash receipts of $12.2 million. This annualises to $48.8 million, which was just a touch ahead of its annual recurring revenue (ARR) of $48.4 million during the first half.

These cash receipts were, however, offset by cash operating payments of $15.8 million. This reflects the first full quarter for the ClearSlide and Agnitio acquisitions and the payment for VoiceVibes acquired in January.

At the end of the period, Bigtincan had $59.1 million in cash and cash equivalents. It believes this leaves it well funded to continue its growth strategy.

Bigtincan’s CEO and Co-Founder, David Keane, said: “Bigtincan continues its leadership in Sales Enablement globally, with leading technology and a strong focus on execution. The importance of our vision of connecting every customer facing worker with the digital and remote economy has been highlighted through the pandemic and remains more relevant than ever before.”

Outlook

Based on its in third quarter deferred revenue, remaining performance obligations, and anticipated revenue from renewals, Bigtincan currently expects its revenue to be in the range of $43 million to $44 million in FY 2021. This compares to its previous guidance of between $41 million and $44 million.

In addition, management is now forecasting its ARR to be at the top end of its FY 2021 guidance range of $49 million to $53 million. This assumes a stable exchange rate and stable customer retention.

This compares to FY 2020’s ARR of $35.8 million, representing year on year growth of 36.9% to 48%.

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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. 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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