Bigtincan share price climbs amid 143% revenue explosion

Shareholders are welcoming a booming year for Bigtincan today…

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Key points

  • The Bigtincan share price is firming on record results
  • Revenue more than doubled compared to the prior year, hitting $108.6 million
  • Management expects cash flow breakeven to be achieved in FY23

The Bigtincan Holdings Ltd (ASX: BTH) share price is finding some momentum today.

Heading into lunch, shares in the sales enablement software provider are 3.7% in the green. The positive move puts the company's share price at 70 cents. Meanwhile, the tech sector is experiencing a more subdued performance on Tuesday, with the S&P/ASX All Technology Index (ASX: XTX) up 0.91%.

This pleasing showing from Bigtincan follows the release of the company's full-year FY22 results. Here are the highlights:

Big growth bolsters Bigtincan share price

  • Annualised recurring revenue (ARR) up 126% year on year to $120.1 million
  • Revenue up 143% to $108.6 million
  • Gross margins improved by 3% to 88%
  • Adjusted EBITDA of $4.1 million, up from $6.1 million loss
  • Lifetime value (LTV) up 107% to $812 million
  • LTV over customer acquisition cost (CAC) improved 13% to 4.0
  • Cash at the bank of $38.9 million as at 30 June 2022

What else happened in FY22?

For a company still focused on scaling up, the full-year result for Bigtincan ticks a lot of boxes.

Most importantly, top-line growth continued its accelerating trend during the 12-month period. As noted above, revenue increased by 143% in FY22. This was fuelled by a mix of organic growth and acquisitions, split at 53% and 47% respectively. For comparison, revenue was dialled up by a smaller 41.5% in FY21.

It is worth noting that this growth did come at a cost. Operating expenses jumped 142% to $127 million in FY22 due to acquisition costs, new technology investments, network infrastructure, and engineering resources.

However, the software provider now attests to having 20% of the top 500 companies globally as Bigtincan customers. This considerable foothold in the market could be giving the Bigtincan share price a boost today.

What did management say?

In light of the record result, Bigtincan co-founder and CEO David Keane fleshed out the company's achievements, stating:

In FY22, Bigtincan continued its strong trajectory of organic growth while adding scale through the transformative acquisition of Brainshark. We are happy with the quality of people, customers and technology that came with Brainshark and I'm very much looking forward to discussing Bigtincan's newly integrated product offerings with our enterprise customers this year.

What's next?

Management was confident enough in the stability of the business to provide guidance for FY23. It sure helps when the company's revenue is 94.4% recurring in nature.

For FY23, Bigtincan management is expecting between $137 million and $143 million in ARR. Meanwhile, revenue is forecast to be in the range of $123 million to $128 million. At the midpoints, these figures would suggest improvements of 15.7% and 15.6% respectively.

Additionally, the team believes cash flow breakeven will be achieved in FY23.

Bigtincan share price snapshot

Unfortunately, the Bigtincan share price has not been an exception to the dismal performance of tech shares in 2022. So far this year, the ASX-listed sales enablement business has tumbled 35%.

As a result, the company now trades on a price-to-sales (P/S) ratio slightly below the Australian software industry average of 4.3 times. Based on the current Bigtincan share price, its P/S ratio is sitting around 3.5 times.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended BIGTINCAN FPO. The Motley Fool Australia has positions in and has recommended BIGTINCAN FPO. 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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