The Iress Ltd (ASX: IRE) share price is crashing lower in Thursday trade following the release of the company's full-year financial results. 

Iress shares were trading as much as 9.2% lower today and are currently going for $12.61 at the time of writing, representing a 7.14% drop.

How did Iress perform in 2019? 

In 2019, Iress reported group revenue growth of 10% to $508.9 million (+8% in constant currency terms). Revenue growth was underpinned by strong underlying performance in Australia and the United Kingdom. The acquisition in May of international market data business QuantHouse also contributed $21.9 million to group revenue. 

Group segment profit for Iress also increased 10% to $152.1 million (+10% in constant currency terms). The full-year result was at the top end of previously issued guidance. Every segment of the business, with the exception of Mortgages, saw an increase in direct contribution.

In constant currency, Mortgages recorded a 2% drop in operating revenue and a 9% decline in direct contribution. The revenue and margin decline in Mortgages was a result of timing and mix of client projects, as well as investment in Australia.

The standout performer was the UK and Europe which was the largest contributor to overall growth for the group. The direct contribution from the UK and Europe was up 17% to $91.9 million. Strong ongoing demand for Xplan, Private Wealth, Sourcing and a contribution from QuantHouse were the main drivers of the result. Underlying margins in the UK and Europe also rose 2% to 68%, reflecting the improved operating leverage in that market. 

Net profit after tax for the group rose 2% to $65.1 million. However, excluding the impact from adopting the new lease accounting standard AASB16 and the QuantHouse acquisition, net profit was up 11% to $71.0 million.

Earnings per share increased 1% on 2018 to 37.9 cents, while Iress also declared an unchanged final dividend of 30 cents per share, franked at 40%. 

Outlook for 2020 

Iress expects 2020 segment profit to grow between 3% and 8% ($156 million to $164 million) on a constant 2019 currency basis. This forecast includes the net impact of the company's recent acquisitions of QuantHouse and BC Gateways.

Management also noted that the execution of medium-term growth opportunities will bring 2020 investment ahead of revenue.

Iress expects growth to be weighted heavily towards the second half in 2020. The predicted skew in earnings is a result of the timing of investment, revenue and client projects.  

The post Iress share price falls 9% on FY19 results release appeared first on The Motley Fool Australia.

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Motley Fool contributor Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia has recommended IRESS Limited. 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.

The Class Ltd (ASX: CL1) share price was down as much as 17.39% today to an intra day low of $1.71 following the release of the company's interim 1H20 result. At the time of writing, Class shares are trading 14.49% lower at $1.77.

How did Class perform in the first-half of FY20?

For the half-year ended 31 December 2019, Class reported operating revenue growth of 8% to $20.5 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 7% to $8.1 million, while net profit after tax decreased 30% to $3.1 million. The Directors of Class also declared a fully franked interim dividend of 2.5 cents.

The fall in profitability occurred due to a number of factors. A substantial 25% increase in product investment was the main catalyst with the software provider lifting product investment from $4.4 million to $5.5 million for the period. Increased investment is a key component of the company's reimagination strategy where it is planning to invest $12 million in FY20 on product and technology development.

The rise in product investment saw Class expense an additional $1.1 million of development costs compared to the prior corresponding period (pcp). Depreciation and amortisation also rose $1.0 million in aggregate for the period. Part of this was due to the adoption of the new leasing standard AASB16 that resulted in a depreciation charge of $0.4 million.

Furthermore, the company also recorded $0.5 million in acquisition and corporate advisory costs for the period. This was in relation to its NowInfinity acquisition and exploration of other opportunities. 

Market share continues to grow

As at 31 December 2019, Class had a total of 183,955 accounts (30 June 2019: 179,082). This includes 174,360 self-managed super fund (SMSF) accounts on Class Super and 8,875 accounts on Class Portfolio. 

The company uses a data-driven approach to target sales in areas where they are underweight in comparable market share. As a result, Class' market share rose 3.1% on the pcp.

The company continues to outgrow the overall market and now holds a 28.4% market share in the SMSF software market. However, the growth in total accounts has materially slowed over the last several quarters. Customer acquisition costs noticeably rose by 20.3% to $213 for the period. 

Outlook

Looking forward, Class is targeting an EBITDA margin in the underlying business of 40%. The company is also aiming for 14% revenue growth in FY20 inclusive of the NowInfinity acquisition. Class expects NowInfinity product revenue in FY20 to be around $7 million. 

Other notable fallers on the ASX today include Altium Limited (ASX: ALU), who released its half-year results after market close yesterday, and Netwealth Group Ltd (ASX: NWL) who released its results this morning. 

The post Class share price crashes 17% on 1H20 profit slump appeared first on The Motley Fool Australia.

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Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Netwealth. The Motley Fool Australia owns shares of Altium and Class Limited. 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.

The Life360 Inc (ASX: 360) share price is up 7.64% to $3.24 in Wednesday trade following the release of the company's quarterly business update and Appendix 4C. 

What did Life360 report? 

For the December 2019 quarter the family networking app reported revenue of US$18.2 million, which was 58% higher than the prior corresponding period. Furthermore, annualised monthly revenue (excluding a one-off revenue contribution) in December 2019 was US$75.4 million. This slightly exceeded the prospectus forecast and was up 67% year-on-year. Calendar year revenue for 2019 was US$59.0 million, an 84% increase year-on-year and surpassed the prospectus forecast of US$58.6 million. 

Average revenue per Paying Circle (ARPPC) rose 14% year-on-year in the quarter. The growth was underpinned by the shift to higher value Driver Protect subscriptions and a move from annual to monthly subscription packages. For the year, ARPPC was up 10%, which was ahead of the prospectus projections of a decline of around 2%. 

Life360 reported Paying Circles were up 43% year-on-year to around 827,000. However, this was lower than the prospectus forecast of 940,000. Management attributed this to deliberately shifting users to Driver Protect, which supports higher pricing and better retention. Driver Protect accounted for more than 70% of total subscriptions by the end of 2019. This was ahead of prospectus model assumptions of less than 60%.

Life360 also reported paid user acquisition spend of US$3.9 million for the quarter and US$19.4 million for 2019. This was less than the prospectus forecast of US$25.9 million. The lower acquisition spend was attributed to the achievement of significant efficiencies and strong organic growth. 

User base continues to expand 

User metrics for Life360 were also strong for the quarter. The company reported a global monthly active user (MAU) base of 27.2 million, up 47% year-on-year. This also surpassed the prospectus forecast of 26 million. MAU rose 2.4 million in the December quarter and 8.7 million for 2019. The main driver was the United States (US), which represents 60% of total MAU.

US MAU rose a record 1.9 million for the quarter to 16.3 million. The user base increased by 6.3 million in 2019, representing 63% year-on-year growth and was ahead of the prospectus forecast of 14.1 million. Management noted that its US operations delivered record sequential MAU additions in every quarter in 2019. 

Foolish takeaway

Life360 reported a solid quarter with strong revenue growth underpinned by improving user metrics. At the end of 2019, the company had a cash balance of US$64.1 million with no debt. However, the business is yet to reach cash flow break-even.

For the December quarter, it reported an operating cash loss of US$6.7 million. For calendar year 2019 the operating cash loss was $30.5 million, which exceeded the prospectus forecast of US$24.6 million. The variance was attributed to year-end prepayments of US$6.0 million that were not included in the prospectus forecast. 

Shares in Life360 have disappointed investors after listing on the ASX in May 2019 at an issue price of $4.79. With the underlying business continuing to grow, the business is worthy of further monitoring for small-cap investors. 

Other small-cap technology companies that have risen this month from positive quarterlies include Bigtincan Holdings Ltd (ASX: BTH) and Mach7 Technologies Ltd (ASX: M7T). 

The post Life360 share price rises 7% on strong quarterly update appeared first on The Motley Fool Australia.

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Motley Fool contributor Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of BIGTINCAN FPO and MACH7 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.

It has not been a good start to 2020 for dual-listed software provider Gentrack Group Ltd (ASX: GTK). The Gentrack share price has fallen 39% this year to $2.21 after releasing 2 announcements that disappointed investors. 

Adverse market conditions persist 

Last Wednesday, Gentrack announced that it is continuing to experience difficult market conditions in its key utilities markets. Regulatory price caps on electricity in the UK and Australia, in conjunction with competitive market conditions, has resulted in reductions and deferrals of IT investment. This has affected Gentrack's sales pipeline to a larger degree than previously expected. 

Furthermore, E.ON, one of Gentrack's major UK utility customers, has revealed that it intends to suspend deployment of its new Gentrack billing platform. E.ON is planning to focus resources on integrating the recently acquired Npower business. 

The difficult market conditions and E.ON's decision prompted Gentrack to undertake a detailed re-forecasting exercise. The results of the exercise were released yesterday. 

Gentrack now expects FY20 earnings before interest, tax, depreciation and amortisation (EBITDA) to be between NZ$8 million and NZ$12 million. The company had previously announced in November that it expected FY20 to be broadly flat after reporting FY19 EBITDA of NZ$24.8 million. Thus, yesterday's revision was a ~60% downgrade at the midpoint. The announcement was worse than what investors had priced in, with Gentrack shares tumbling 14.3% yesterday. 

Gentrack's 4th earnings revision since July 

Yesterday's downgrade was the 4th earnings revision the company has issued since July 2019. Gentrack initially expected a strong second half with FY19 EBITDA projected to be marginally ahead of the NZ$31.0 million reported in FY18.

In July, Gentrack revised its FY19 EBITDA forecast to be in the range of NZ$27 million to NZ$28 million. It attributed the downgrade to delays in customer projects and contracts, and bad debt risks in the UK. 

In September the company issued another market update. It adjusted its FY19 EBITDA forecast to be in the range of NZ$25 million to NZ$26 million. The downgrade was attributed to an increase in bad and doubtful debt provisions in the UK utilities market, which deteriorated over the quarter. 

The 3rd revision occurred in November when Gentrack announced its FY19 result and reported EBITDA of NZ$24.8 million. This narrowly missed the bottom end of the September forecast and was 19.9% lower than FY18. 

Cutting costs

Looking forward, Gentrack intends to reduce its cost base by around NZ$8 million on a full year basis. Approximately NZ$4 million of savings will occur in the current year. Notably, capitalised software development is forecast to fall from NZ$5.1 million in FY19 to NZ$1.0 million in FY20. The company is also continuing its transition from an upfront license model to a recurring SaaS model.

Whether the company can turnaround its fortunes after a difficult period remains to be seen. Investors will have to wait for the company's AGM on 26 February for a further update. 

Other notable decliners in 2020 include Kogan.com Ltd (ASX: KGN) and Mosaic Brands Ltd (ASX: MOZ).

The post Why the Gentrack share price is down 39% in 2020 appeared first on The Motley Fool Australia.

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Motley Fool contributor Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Kogan.com ltd. 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.

The share price of 5G Networks Ltd (ASX: 5GN) is up 15.57% to $0.96 at the time of writing following today's release of its quarterly activities report and 4C.

Record operating cash flow for 5G Networks

5G Networks is a telecommunications carrier that operates across Australia. It provides data networks, data centre and cloud services, and managed services in the business-to-business market.

For the quarter ended 31 December 2019, 5G Networks achieved a record $2.0 million of operating cash flow. The record result was attributed to the migration of customers to high margin annuity services and synergy implementation. Year-to-date operating cash flow of $3.3 million was up 58% over the prior corresponding period. 

Quarterly cash receipts were $14.6 million and half year cash receipts totalled $28.1 million, a 19% increase over the prior corresponding period. Moreover, the company booked $4.6 million of new and re-signed revenue for the half. At quarter end, 5G Networks had a cash balance of $2.8 million and an additional $2.2 million in available debt to fund acquisitions. 

Other highlights from the quarter include the successful launch of the company's indirect channel for faster penetration into new markets. Of particular note was the signing of Servers Australia as the first indirect channel partner, which was announced last week.

The agreement enables 5G Networks to provide capacity across its city-based data centres for an initial 2-year term with a minimum spend of $750,000. Servers Australia is one of Australia's largest hosting partners and the signed agreement offers the opportunity to resell the 5G Networks cloud solution in conjunction with high-speed fibre networking. 

Foolish takeaway

5G Networks has pursued an aggressive acquisition strategy that has rewarded shareholders with a 76% gain over the last year. It has also resulted in a lot of volatility, with the stock swinging between $0.47 and $1.72 during the period. The company is worth monitoring for small-cap investors as it continues to gain traction in a growing market. 

Other small-caps of note for investors to monitor include Alcidion Group Ltd (ASX: ALC), Audinate Group Ltd (ASX: AD8) and Mach7 Technologies Ltd (ASX: M7T). 

The post 5G Networks share price rises 15% on record quarterly result appeared first on The Motley Fool Australia.

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Motley Fool contributor Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd, AUDINATEGL FPO, and MACH7 FPO. The Motley Fool Australia has recommended Alcidion Group Ltd and AUDINATEGL 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.

The Mach7 Technologies Ltd (ASX: M7T) share price won't be going anywhere on Friday after the enterprise imaging solutions business requested a trading halt. 

Why are Mach7 Technologies shares in a trading halt? 

This morning Mach7 requested a trading halt pending a material announcement in relation to a proposed capital raising. Shares will be in a trading halt until the earlier of commencement of normal trading on December 3, or when the announcement concerning the proposed capital raising is released to the market. 

According to an article in the Australian Financial Review, Mach7 is attempting to raise $20 million at $0.62 a share.

The capital raising comes after a record quarterly performance by Mach7. For the first quarter of FY20, the company recorded its strongest quarterly cash flow result in its history. It received $4.7 million in cash from customers and recorded $1.7 million in positive operating cash flow. Free cash flow came in at $1.6 million. As a result, cash and cash equivalents jumped from $2.3 million to $4.3 million by quarter end.  

The $4.7 million in cash receipts for the quarter consisted of $1.6 million of support fees (recurring cash) and $3.1 million of software and services receipts. Notably, the company received a significant payment from Advocate Aurora Health after it acquired the Mach7 Platform in July.  

Cash payments for the September quarter were $3.1 million, which was similar to the prior quarter's $3.0 million. Moreover, cash outflows for the December 2019 quarter are projected to be $3.6 million.

At quarter end Mach7 had $10.7 million in service and support fees under contract, including $8.5 million in contracted annual recurring revenue. Management also confirmed in its commentary that it was on track to meet its 12-month free cash flow break even target ending in February 2020. 

How have Mach7 shares performed in 2019?

A number of material contract wins has resulted in Mach7 shares rising 231% in 2019. In FY20, the company has already secured $7.5 million of sales orders with a total contract value over 5 years. 

Other small cap technology companies that have also rewarded shareholders with large gains in 2019 include Alcidion Group Ltd (ASX: ALC), Audinate Group Ltd (ASX: AD8) and Bigtincan Holdings Ltd (ASX: BTH).

The post Why Mach7 Technologies is in a trading halt appeared first on The Motley Fool Australia.

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Motley Fool contributor Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd and MACH7 FPO. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO and BIGTINCAN FPO. The Motley Fool Australia has recommended Alcidion Group Ltd. 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.

The share price of Aristocrat Leisure Limited (ASX: ALL) has jumped to a 52-week high of $34.71 in Friday trade. Investors have reacted bullishly to the company's full year result, with shares up 9% over the last 3 trading sessions. 

Americas and digital drive growth for Aristocrat 

For the year ended 30 September 2019, Aristocrat reported a 22.7% rise in revenue to $4.4 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 20.2% to $1,597 million. Normalised profit after tax and before amortisation of acquired intangibles rose 22.6% to $894.4 million.

Aristocrat's cash flow was strong with operating cash flow rising 16.2% to $1,086 million. Net debt to EBITDA also declined from 1.7 times to 1.4 times. Aristocrat also lifted its dividend with the total dividend for FY19 up 21.7% to 56 cents per share.

On a segment level, the main drivers of the rise in earnings came from Aristocrat's land-based operations in the Americas and its Digital business.

The Americas business saw revenue rise 14.2% to US$1,363 million and segment profit increase 15.5% to US$750.6 million. The result was driven by continued strength in the company's gaming operations and market share gains in outright sales. Aristocrat's move into adjacent markets is gaining traction, with management noting on the conference call that adjacent markets sales represented around 16% of total outright sales in North America. 

Aristocrat's Digital business reported FY19 revenue growth of 24.1% to US$1,252 million. The rise occurred due to the scaling of new titles and the full year benefit from the acquired businesses of Plarium and Big Fish. In FY19, Aristocrat had 9 games with bookings in excess of US$50 million. 

Segment profit rose 11.9% to US$370.2 million as margins contracted because of a change in mix with a higher proportion from casual games and an increase in user acquisition. User acquisition soared 30.6% to US$328.0 million, driven by the full year impact of acquisitions and investment in new games, most notably from RAID: Shadow Legends. 

Forex and taxation tailwind

In FY19, Aristocrat benefitted from favourable currency movements, with foreign exchange contributing $65.7 million to normalised profit. Furthermore, a lower tax rate also boosted normalised profit by $21.4 million.  

Aristocrat also announced a change in its Group structure that will result in a reduction in foreign cash tax paid and book tax expense from FY20 onwards. The change will have no impact on the amount of Australian tax paid.

A one-off deferred tax asset of around $1 billion will be booked in the first half of FY20. Moreover, the group's effective tax rate will be around 23.5% to 24.5% over the next 2 to 3 years. This would be materially lower than the effective tax rate of 27.5% in FY19. 

Foolish takeaway

This was a strong result for Aristocrat as the company continues to successfully execute its growth strategy. It remains a leader in its space and has outperformed other gaming businesses such as Ainsworth Game Technology Limited (ASX: AGI) and Star Entertainment Group Ltd (ASX: SGR) in 2019. 

The post Why the Aristocrat Leisure share price hit a 52-week high today appeared first on The Motley Fool Australia.

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Motley Fool contributor Tim Katavic owns shares of Aristocrat Leisure Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

The Data#3 Limited (ASX: DTL) share price has risen 3.50% to $3.55 in today's trade so far, after yesterday's trading update at the company's AGM.

Profit expectations rise for Data#3 

The information technology services and solutions provider announced on Wednesday that it has made a strong start to FY20. The extent of that strength is still dependent on the realisation of opportunities through November and December.

Data#3 currently projects its first half pre-tax profit to be in the range of $11.0 million to $12.5 million. This would represent a substantial rise over the prior corresponding period when it reported $9.0 million in pre-tax profit.

Moreover, the guidance is particularly impressive when considering the business was cycling a strong result in the prior corresponding period. For the first half of FY19, Data#3 delivered revenue growth of 17.7% to $644.4 million and pre-tax profit soared 123.3% to $9.0 million. 

Data#3 will announce its first half result for FY20 and interim dividend on 19 February 2020. In addition, the company reaffirmed its intention to maintain its usual dividend practice. As a result, investors can expect the majority of earnings to be paid out as dividends with Data#3 paying out 91% of earnings in FY19. 

Building off a strong FY19

At the time of writing, shares in Data#3 have risen by 136% in 2019. The strong rise was underpinned by a record result in FY19 where Data#3 saw revenues grow 19.8% to $1.4 billion and pre-tax profit rise 30.2% to $26.6 million.

The top-line growth was attributed to solid revenue growth in the company's core business and significant growth in public cloud-based revenues. Data#3 continues to benefit from digital transformation projects that are driving growth in its core infrastructure, software and services businesses. 

Other small cap technology companies that have enjoyed strong returns in 2019 include Alcidion Group Ltd (ASX: ALC), Audinate Group Ltd (ASX: AD8), Bigtincan Holdings Ltd (ASX: BTH) and Mach7 Technologies Ltd (ASX: M7T). 

The post Data#3 share price climbs higher after AGM update appeared first on The Motley Fool Australia.

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Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd and MACH7 FPO. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO and BIGTINCAN FPO. The Motley Fool Australia has recommended Alcidion Group Ltd and Data#3 Ltd. 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.

The Bigtincan Holdings Ltd (ASX: BTH) share price is up 10.92% to $0.66 at the time of writing, after the company released its quarterly report and appendix 4C this morning.

What did Bigtincan report for Q1 FY20?

For the September quarter, Bigtincan reported customer cash receipts had increased by 56% to $5.3 million. Cash payments also rose 25% to $8.5 million and included working capital changes and acquisition-related expenses. As a result, the sales enablement automation platform business posted an operating cash loss of around $3.1 million. 

For the quarter, Bigtincan also invested $4.8 million in cash in acquiring Veelo, Asdeq Labs and the final earnout payment to Fatstax. At quarter end, the company had $17.6 million in cash and remains well funded to execute its future growth plans. 

In September, Bigtincan conducted an institutional placement to raise $20 million (funds received in October) to primarily fund the acquisition of Xinnovation, Inc.. Xinnovation is a Boston-based leader in sales enablement for financial services organisations.

The acquisition was completed in October and will add key technology capabilities to the Bigtincan platform and ~$3 million in annualised recurring revenue. Moreover, the financial services vertical will present Bigtincan with green field market opportunities for additional growth. 

A key highlight for the quarter was the announcement of a signed reseller agreement with NTT Docomo INC.. The leading Japanese telco and systems integrator will be able to sell Bigtincan software-as-a-service solutions to its enterprise customers. 

Furthermore, the company also reported new wins with Fortune 500 companies such as Nike and Wyndham Destinations. Other notable customer wins included ABB (new European customer), Stratasys, BMT Group, Cogeco and Phoenix Contact. 

Outlook 

Bigtincan stated that it remains on track to meets it 30–40% organic revenue growth target in FY20 with retention rates expected to remain stable. 

Shares in Bigtincan have doubled in 2019, making it one of the best performing small-cap technology companies on the ASX. Other notable performers include Alcidion Group Ltd (ASX: ALC) and Audinate Group Limited (ASX: AD8). 

The post Bigtincan Holdings share price rises 10% on Q1 update appeared first on The Motley Fool Australia.

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Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd and AUDINATEGL FPO. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO. The Motley Fool Australia has recommended Alcidion Group Ltd and AUDINATEGL 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.

The Mach7 Technologies Ltd (ASX: M7T) share price is up 15.44% to $0.78 in morning Thursday trade, following the release of its quarterly cash flow report and a business update. 

What did Mach7 Technologies announce in its quarterly update? 

For the first quarter of FY20, Mach7 announced that it has recorded its strongest quarterly cash flow result in its history. The company received $4.7 million in cash from customers and recorded $1.7 million in positive operating cash flows. At the end of the quarter its cash balance stood at $4.3 million.  

The $4.7 million in cash receipts from customers consisted of $1.6 million of support fees (recurring cash) and $3.1 million of software and services receipts. The quarterly cash receipts figure included a large payment from Advocate Aurora Health after it purchased the Mach7 Platform in July. Management also noted that cash receipts for the quarter did not include any receipts from Hospital Authority Hong Kong. 

Cash payments for the quarter were $3.1 million, which was in-line with the prior quarter of $3.0 million. The company also recorded free cash flow for the quarter of $1.6 million, and remains on track to meet its 12-month free cash flow break even target ending in February 2020. 

The business update also noted that Mach7 is completing active software installation and/or data migration projects across 20 of its customers. As a result of these projects the company will generate $2.2 million in services revenue that will be recognised over the remaining installation period on a % complete basis. The majority of this revenue is projected to be recognised in FY20. 

A small-cap stock for investors to watch

Mach7 has started FY20 strongly after securing $7.5 million of sales orders with a total contract value over five years. This includes its largest ever US deal to date with Advocate Aurora Health, valued at $5.7 million. The company has managed to grow its contracted annual recurring revenue to $8.5 million. 

At the time of writing, shares in Mach7 have risen 271% in 2019. Other small cap technology companies that have rewarded shareholders in 2019 include Alcidion Group Ltd (ASX: ALC), Audinate Group Ltd (ASX: AD8) and Bigtincan Holdings Ltd (ASX: BTH).

The post Mach7 Technologies share price jumps 15% on quarterly update appeared first on The Motley Fool Australia.

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Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd, AUDINATEGL FPO, BIGTINCAN FPO, and MACH7 FPO. The Motley Fool Australia has recommended Alcidion Group Ltd, AUDINATEGL FPO, and 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.

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price has hit a 52-week high of $17.71 in Tuesday trade. Investors have bid up the company's share price this week following the release of 2 bullish announcements yesterday.

The first announcement revealed that the company has received regulatory clearance in the United States (US) to sell its new full-face mask. The second announcement was an upgrade to earnings guidance for FY20. 

Vitera regulatory clearance

Fisher & Paykel Healthcare has received regulatory clearance in the United States to sell its F&P 'Vitera' mask, which is used to treat obstructive sleep apnea. The new mask redefines mask performance via a combination of unique technologies that provide high levels of stability and durability. 

Vitera is already available for sale in Australia, Canada, New Zealand and Europe. The new mask is also expected to be available for sale in other markets once regulatory approval is received.

In the United States, the company received regulatory clearance to sell Vitera faster than the timeframe it had previously guided for. As a result, this has become a meaningful contributor to raised guidance for FY20. 

FY20 guidance lifted

For the financial year ending 31 March 2020, Fisher & Paykel Healthcare expects operating revenue to be around $1.19 billion and net profit after tax to fall in the range of $255 million to $265 million. The guidance assumes a NZD/USD exchange rate of around 63 cents for the remaining part of the financial year.  

The company had previously guided for FY20 operating revenue to be around $1.17 billion and net profit after tax to be between $245 million to $255 million. That guidance was based on an assumed NZD/USD exchange rate of 64 cents. 

Management also noted that there are no changes to revenue and earnings guidance for the first half of FY20. The full year guidance incorporates a further weakening of the NZ dollar and an adjustment to the projected research and development tax credit. 

Foolish takeaway

Fisher & Paykel Healthcare shares have now risen 42% in 2019. The company remains one of the best healthcare stocks on the Australian market alongside CSL Limited (ASX: CSL), Cochlear Limited (ASX: COH) and major competitor ResMed Inc. (ASX: RMD).

The post Why the Fisher & Paykel Healthcare share price just hit a 52-week high appeared first on The Motley Fool Australia.

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Tim Katavic owns shares of CSL Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and ResMed Inc. 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.

Health supplements company Blackmores Limited (ASX: BKL) has been one of the best performers on the Australian market in September, with its share price rising 18% to $85. The jump has occurred despite Blackmores delivering a weak FY19 earnings report in August. 

FY19 earnings disappoint 

For the year ended 30 June 2019, Blackmores reported revenue of $610 million, which was 1% higher on the prior period. On the bottom line, net profit after tax decreased by 24% to $53 million. Underlying net profit was down 21% to $55 million after adjusting for one-off costs related to streamlining the business.

Issues in the China segment of the business was one of the main reasons for the financial underperformance. Sales in China (key export accounts and in-country sales) fell 15% to $122 million. The fall in sales was attributed to changes in e-commerce laws that took effect from 1 January 2019 and shifting consumer buying patterns. Weaker sales and increased investments in brand and expansion in in-country capabilities resulted in earnings before interest and tax in the China segment declining 40% to $21 million. 

Blackmores responded to the legislative changes by deliberately reducing e-commerce platform inventory in Q4. As a result of this measure, Q4 group revenue decreased 10% to $149 million and net profit fell 50% to $9 million. 

Outlook

Blackmores expects trading conditions in its channels to China to continue to be challenging for the first half of FY20. The change in Chinese e-commerce laws, costs associated with restructuring and the Braeside acquisition are expected to result in first-half profit being lower than the prior corresponding period. In its outlook commentary, management noted that the second-half is expected to benefit from operational efficiencies due to its Business Improvement Plan, which is projected to achieve $60 million in cumulative savings over 3 years. 

Foolish takeaway 

The Blackmores share price has risen 11% following the news that Bellamy's Australia Ltd (ASX: BAL) had received a takeover approach from China Mengniu Diary Company (which valued the company at $1.5 billion). Some investors believe that Blackmores' exposure to China could make the business a takeover target as well. 

Blackmores is being valued as a growth company with shares currently trading for around 27 times trailing earnings. Zooming out and viewing the performance of the business over the last few years, we can see that the company has not managed to exceed its record performance in FY16. Earnings per share in FY19 of $3.09 was 47% lower than the $5.81 reported in FY16. 

Whilst an investment in Blackmores looks more attractive from a valuation perspective than it was a few months ago, the issues in China are material to the business and the valuation is still high. Short interest in Blackmores has notably risen over the last month to 9.92% as short sellers believe the company is overvalued. In light of these concerns, I think it would be prudent for long-term investors to wait for the company's half year-result in February before considering an investment. 

The post Is it time to buy shares in Blackmores? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. 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.

The share price of Dicker Data Ltd (ASX: DDR) has risen around 6% in the past week to $6.96 per share (at the time of writing), following the release of its interim financial report last Wednesday. The IT distribution business delivered another excellent result with both the top and bottom lines growing strongly. 

A look at Dicker Data's interim performance

For the 6 months ended 30 June 2019, Dicker Data reported an 18.7% increase in revenue to $852 million, which was ahead of management's expectations. The business continues to add new vendors and expand the breadth of products offered by its existing vendors. 

In 2018 and for the first-half of 2019, Dicker Data added 10 new vendors who contributed $18.8 million in incremental first-half revenue. However, it was the $115.6 million (a 16.2% increase) in additional revenue from existing vendors that was the main catalyst in the company's top-line growth. On a sector breakdown, hardware and virtual services sales increased 16.9% to $670.2 million and software sales rose 26.4% to $176.5 million.

Dicker Data's gross profit for the first half of FY19 increased 21.4% to $77.2 million. Gross profit margin rose to 9.1%, a 20 basis points improvement over the prior corresponding period. The improvement in gross profit margin was primarily driven by an increase in vendor rebate payments on overachievement of vendor targets. 

On the expense side, first-half operating expenses increased by 5.1% over the prior corresponding period. This was significantly lower than the increase in revenue and as a result operating expenses as a percentage of sales declined from 5.5% to 4.9%. Furthermore, total costs as a percentage of sales fell from 6.1% to 5.4%. 

The top-line growth in conjunction with a higher gross profit margin and cost control resulted in operating profit before tax soaring 51.2% to $32.3 million. Net profit after tax was up 50.5% to $23.8 million and earnings per share increased 49.7% to 14.73 cents.

Outlook

Dicker Data is upbeat about its second-half prospects and remains confident of achieving its previously issued guidance of $51.4 million in operating profit before tax for FY19. With around 63% of its full-year guidance achieved in the first-half, it is likely that Dicker Data will end up exceeding its full-year guidance.  

Shares in Dicker Data have now risen 150% in 2019 due to a number of strong earnings reports. Other small cap stocks that have risen by more than 100% in 2019 include Audinate Group Ltd (ASX: AD8) and Megaport Ltd (ASX: MP1).

The post Why the Dicker Data share price is on the rise this week appeared first on The Motley Fool Australia.

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Tim Katavic owns shares of Dicker Data Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of MEGAPORT FPO. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO and Dicker Data Limited. The Motley Fool Australia has recommended MEGAPORT 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.

Software provider Bravura Solutions Ltd (ASX: BVS) share price is up 7% to $4.83 in Tuesday trade. Bravura shares have been volatile following the release of the company's full-year result last Friday. After hitting an intra-day high of $5.23 on Friday, the share price fell to a low of $4.13 before recovering to close down 2% at $4.60. 

FY19 result beats analysts' expectations

Bravura reported another solid operational performance for the financial year ended 30 June 2019. Group revenue increased 16% to $257.7 million, narrowly beating the consensus estimate of $255.8 million. 

Group earnings before interest, tax, depreciation and amortisation (EBITDA) margin increased by 160 basis points to 19.0%. As a result, the business' operating leverage expanded with group EBITDA rising 27% to $49.1 million. For FY19 Bravura reported a 19% increase in earnings per share to 15.0 cents. This was slightly ahead of the consensus estimate of 14.8 cents. 

The FY19 result was driven by strong growth across the Bravura product suite. The Wealth Management segment reported a 14% increase in revenue to $176.8 million and segment EBITDA rose 17% to $53.9 million. The company's flagship solution, Sonata, now makes up almost all of the Wealth Management segment. 

The standout performer, however, was Bravura's Funds Administration segment which reported a 22% increase in revenue to $80.9 million. Segment EBITDA rose 21% to $32.3 million after benefitting from increased implementation and project work from a renewed and enhanced contract with a major global client and improved utilisation from existing clientele. 

Outlook

Management expects FY20 net profit after tax to grow in the mid-teens as a result of Bravura's strong recurring revenue (76% of total revenue in FY19) and new sales opportunities. 

Bravura also announced on Friday that it will acquire Midwinter Financial Services for $50 million. Midwinter's financial planning software, AdviceOS, is expected to complement Bravura's existing product suite in an adjacent market with attractive growth prospects. The software "powers back office administration for financial advisers and drives online self-directed digital advice portals for superannuation funds in Australia." The acquisition is projected to be earnings per share accretive in the first year of ownership. 

Further acquisitions are likely in the future with Bravura holding $194.8 million in cash at the end of June. 

Other notable risers on the ASX today include Nanosonics Ltd (ASX: NAN) which is up 30% and Afterpay Touch Group Ltd (ASX: APT) which is up 7%. 

The post Why the Bravura share price is up 7% today appeared first on The Motley Fool Australia.

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Tim Katavic owns shares of Bravura Solutions Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Nanosonics Limited. 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.

One of the big winners at the larger end of the market this reporting season has been CSL Limited (ASX: CSL). The share price of the biotech giant rose to a record 52-week high of $239.04 in Thursday morning trade and are now trading just shy of that at $238.90. Shares in CSL have now risen more than 8% since the release of its full-year result last Wednesday. 

FY19: Another record profit for CSL

For the 12 months ended 30 June 2019, CSL reported revenue of US$8,539 million and net profit after tax of US$1,919 million. At constant currency, CSL delivered an 11% increase in revenue and a 17% increase in net profit after tax. 

The main driver of top-line growth in FY19 was CSL Behring, which reported sales of US$7,187 million, an 11% improvement over FY18 at constant currency. The Immunoglobulins segment was the standout performer after it delivered above-market growth with sales increasing by 16% to US$3,543 million. A strong second half in China and the EU also resulted in albumin sales rising 15% to US$1,018 million.  

CSL continues to invest in its plasma collection network with 30 new centres opened in the United States during FY19. The company is also planning to open around 40 new centres in FY20. 

CSL's Seqirus business also delivered a solid result for FY19. It reported revenue of US$1,196 million, a 12% increase at constant currency. The growth was driven by the 19% rise in sales of seasonal influenza vaccines. Earnings before interest and tax at Seqirus in FY19 rose 180% to US$154 million after margins grew 800 basis points from 4.8% to 12.8%. 

Outlook for FY20

Whilst CSL's FY19 result was in line with expectations, it was management's outlook for FY20 that pleased investors and has sent the stock higher over the last week.

CSL has forecast for FY20 net profit after tax to be between US$2,050 million and US$2,110 million, a rise of between 7% and 10% at constant currency. Headline revenue growth is projected to be around 6%.

However, revenue is forecast to rise 10% after adjusting for the General Supply Practice transition in China for albumin. The new distribution model is expected to have a one-off financial effect in FY20 of lowering sales by approximately US$340 million to US$370 million. The bottom-line effect is forecast to be in line with historical CSL Behring margins. 

At $239, CSL has a market capitalisation of around $108 billion and has surpassed BHP Group Ltd (ASX: BHP) in terms of the size on the ASX. Only the Commonwealth Bank of Australia (ASX: CBA) with a market capitalisation of $136 billion is larger on the local share market. 

The post Why the CSL share price just hit a record high appeared first on The Motley Fool Australia.

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Tim Katavic owns shares of CSL Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

The oOh!Media Ltd (ASX: OML) share price is down 21.53% to $3.17 in Friday trade following this morning's release of a trading update and revised guidance for the financial year ending 31 December 2019. The share price fell to a 52-week low of $2.29 in early morning trade before bouncing as the trading session progressed.

The company will release its half-year result on 26 August. Subject to the completion of its external audit, oOh! expects to report revenue of $304.8 million for the half year ended 30 June 2019. This would be an increase of 5% on a pro-forma basis compared to the prior corresponding period. 

The advertising company also expects to report underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $56.0 million for the half year. This would be 2% lower than the prior corresponding period on a pro forma basis with management noting that gross margin for the period had been impacted by product mix. 

Softer advertising market impacts second half 

Whilst the company's first half performance was in line with its previously issued guidance, tracking of its trading activity for the second half of FY19 has revealed a substantial decrease in overall media advertising spend. The challenging operating environment in the wider media market has resulted in oOh!'s third quarter advertising bookings experiencing a "sharp decline" compared to bookings on-hand at the same time in 2018. 

The company's earnings are heavily weighted towards the second half of the calendar year and to the fourth quarter in particular. The update noted that fourth quarter bookings had seen an improvement on the third quarter and on the fourth quarter of 2018. However, trading activity in recent weeks has indicated that the improvement is less than anticipated, and as a result will not be sufficient in offsetting the substantial decrease in the third quarter. 

oOh! had previously guided for FY19 underlying EBITDA to be within the range of $152 million and $162 million. The company now expects underlying EBITDA for FY19 to be in the range of $125 million and $135 million. The revised guidance represents a 17% decline at the midpoint. The guidance also excludes integration costs, the impact from the change in accounting standards via AASB16 and is subject to trading conditions. 

oOh! also confirmed that its integration of Commute remains on track with a predicted run-rate of $16 million in cost synergies for FY19 with additional synergies expected in 2020. 

Other notable fallers on the S&P/ASX 200 (INDEXASX: XJO) today include Automotive Holdings Group Ltd (ASX: AHG) and Breville Group Ltd (ASX: BRG). 

The post Why oOh!Media is the worst performer on the ASX 200 today appeared first on The Motley Fool Australia.

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Motley Fool contributor Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia has recommended oOh!Media Ltd. 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.

One of the worst performing stocks on the ASX last week was Insurance Australia Group Ltd (ASX: IAG). Shares in the blue-chip insurer fell 9.1% to $7.68 due to a combination of the overall market sell-off and an earnings report that fell short of the market's expectations. 

FY19 result disappoints the market 

For the financial year ended 30 June 2019, IAG reported a gross written premium (GWP) rise of 3.1% to $12,005 million. The growth in GWP was at the midpoint of guidance and occurred primarily from higher premiums. 

In FY19, IAG's underlying insurance margin rose 250 basis points to 16.6%. The large increase in underlying margin was mainly the result of an uplift from a full year of 12.5% quota shares and benefits from the company's optimisation program. However, the insurer's reported margin fell by 140 basis points to 16.9% due to higher costs from natural disasters and substantially lower prior period reserve releases. 

The $200 million plus in profit on the sale of the company's Thailand operations in August 2018 helped net profit after tax rise 16.6% to $1,076 million. Cash earnings, on the other hand, decreased 10.0% to $931 million. As a consequence of the fall in cash earnings, IAG's dividend declined 5.9% to 32.0 cents per share, representing a cash payout ratio of 79.4%. 

Outlook

The company provided FY20 guidance of low single digit GWP growth and a reported insurance margin of between 16% to 18%. Shares in IAG had risen to as high as $8.74 in late July and a valuation of around 20 times the consensus earnings per share estimate of 43.59 cents for FY20.

With the low interest rate environment in Australia expected to continue into the near future, the stock offers income-focused investors a 4.2% dividend yield. The search for yield has had a noticeable impact in propelling the share prices of IAG and other blue-chips such as Westpac Banking Corp (ASX: WBC) and the Commonwealth Bank of Australia (ASX: CBA) higher over the last few months.     

IAG remains committed to distributing between 60% to 80% of cash earnings on a full-year basis. Investors should note that the company can no longer guarantee fully franked dividend payments and future dividends are expected to have a franking component in the range of 70% to 100%. This has occurred for a number of reasons, including a higher payout policy in recent years, several capital management initiatives that have utilised the company's franking capacity, and a significant part of IAG's earnings are derived in New Zealand where no franking credit is attached. 

Is it a buy?

With the fall in IAG's share price last week the stock now trades at a valuation of around 18 times consensus FY20 earnings. However, whilst the stock is cheaper, it is still not cheap in my view. An opportunity to acquire shares of IAG at a better valuation may present itself to more patient investors. 

The post Should investors buy the dip in Insurance Australia Group shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Insurance Australia Group Limited. 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.

The Medlab Clinical Ltd (ASX: MDC) share price rose 7.7% to a 52-week high of $0.56 in early Monday trade, although it has since dropped back slightly to $0.51 per share at the time of writing.

The strong start to the trading week occurred after the medical life sciences company announced that it has executed a Heads of Agreement with American Nutritional Corp Inc (ANC) to rapidly expand its nutraceutical business in the United States (US). 

The terms of the agreement

Medlab announced this morning that it has signed a Heads of Agreement with ANC to enter the US market with its existing range of nutraceutical products. ANC is a company based in the US with audited and approved manufacturing capabilities for several large institutional US brands. 

Several of Medlab's current and unique range of nutraceuticals are well-positioned for clients of ANC. In the near term, Medlab's products are expected to enter the medical and consumer markets with larger companies that have established branding and distribution. While Medlab will still feature on the label of these products, the aim will be to rebrand them to suit the client's general branding strategy. 

Commercial terms and specific distribution partners are still to be finalised via the execution of a definitive commercial agreement. At this stage, management expects the first launch of these products into the United States to occur in or around December 2019. 

Medlab also intends to examine other potential international destinations for its products as a number of these institutional companies either market internationally, or are intending to expand internationally in the short to medium term. Furthermore, there remains an opportunity for Medlab to expand its relationship with ANC by capitalising on their manufacturing capabilities in order to provide ongoing economies of scale for the local market.

Notable nutraceutical products that are of interest include Medlab's NanoCelle delivery platform, NRGBiotic, which is currently used in ongoing depression trials at the Queensland University of Technology, and MultiBiotic. All of these products are currently available for sale in Australian pharmacies. 

How has the Medlab share price performed this financial year? 

After a strong start to today's session the Medlab share price has fallen back to $0.51. Shares of the medical life sciences company have now risen 51.4% in FY20 following a number of bullish announcements over the last several weeks.  

Other cannabis stocks such as AusCann Group Holdings Ltd (ASX: AC8) and Creso Pharma Ltd (ASX: CPH) have also risen 5.8% and 6.4%, respectively, in Monday trade. 

The post Why this ASX biotech is printing 52-week highs appeared first on The Motley Fool Australia.

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Motley Fool contributor Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

The Bigtincan Holdings Ltd (ASX: BTH) share price is down 2% to $0.47 in Wednesday morning trade after the sales enablement automation platform business released its quarterly report and Appendix 4C for the quarter ended 30 June 2019. 

What results did Bigtincan report yesterday?

The company reported annualised recurring revenue (ARR) of $23.4 million, representing a 52% increase over the prior corresponding period. Management noted year-on-year organic growth in ARR was 36%, which demonstrated the strength of the core platform. Growth in ARR was strong across all parts of Bigtincan's business including content distribution, learning and coaching, and catalog based systems in key verticals such as Life Sciences, Manufacturing and Retail. 

During the quarter, Bigtincan continued its land and expand strategy that resulted in a number of key enterprise customer wins and expansions globally. These included Anheuser-Busch, Brookdale Senior Living and Sony Playstation. 

The company has also released new products during the quarter including the showcase of Bigtincan Genie voice assistant, and its FatStax acquisition has exceeded the top-tier of its earn-out performance target. 

Bigtincan reported cash receipts from customers of $5.5 million for the quarter, an increase of 119% over the prior corresponding period. The quarterly cash collection for the June 2019 quarter was the highest Bigtincan has reported to date. However, despite the strong increase in cash receipts, the company still reported an operating cash loss of around $1.4 million for the quarter. For the financial year to date, Bigtincan reported cash receipts from customers of $18.8 million and an operating cash loss of $8.2 million. 

At the end of June the company had $25.4 million in cash and cash equivalents after successfully completing a $15.6 million entitlement offer during the quarter, which will be used to fund key organic growth initiatives and M&A opportunities that meet its acquisition criteria. 

What's the outlook for Bigtincan?

Bigtincan reaffirmed that it is on track to deliver in excess of 40% revenue growth in FY19 with retention rates expected to remain stable. Management also noted that the company is well positioned for further growth throughout FY20. The market's focus will now turn towards the release of its FY19 result on 29 August and guidance for FY20.

Shares in Bigtincan are up 74% in 2019 and have been one of the best performing small-cap technology companies on the ASX, alongside Livetiles Ltd (ASX: LVT) and Volpara Health Technologies Ltd (ASX: VHT). 

The post Why the Bigtincan share price is falling today appeared first on The Motley Fool Australia.

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Motley Fool contributor Tim Katavic has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO and VOLPARA FPO NZ. 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.

The share price of streaming giant Netflix, Inc. (NASDAQ: NFLX) fell 10.3% to US$325 on Thursday following the release of its second quarter earnings report after the close of trade on Wednesday.

What happened in the June 2019 quarter? 

Netflix reported a 26.0% rise in revenue to US$4.9 billion, which was in line with the consensus estimate from analysts. Operating income surged 52.8% to US$706 million as the company's operating margin expanded 250 basis points to 14.3%. Diluted earnings per share fell 29.4% to US$0.60 but ended up beating the consensus estimate of US$0.56.

Cash flow continues to be a concern with Netflix reporting negative free cash flow of US$594 million for the quarter and is forecasting negative free cash flow of around US$3.5 billion for the full year in 2019. 

However, the metric that really captured the market's attention and caused the sell-off was the significant miss in subscriber growth. On a net basis, Netflix added 2.7 million paid memberships for the quarter which was 46% below its forecast of 5.0 million. Management noted that the missed forecast occurred across all regions, but slightly more so in the regions where Netflix had increased prices. 

The missed forecast was attributed to a number of factors, including the content slate for the quarter that drove less growth in paid net adds than initially anticipated, and a large first quarter (9.6 million net adds), which might have resulted in a pull-forward effect. Furthermore, the company recorded a small fall in US subscribers with paid memberships declining from 60.23 million in the March quarter to 60.10 million in June. 

Outlook 

Netflix has guided for revenue to grow 31.3% to US$5.3 billion for the September quarter with diluted earnings per share expected to increase by 16.9% to US$1.04. Moreover, the company has forecast for paid net additions to rise by 7.0 million, which would bring the total amount of global streaming paid memberships to 158.56 million.  

Management also acknowledged the expected increase in competition in the streaming space with major services from Disney and AT&T among others in the pipeline. This remains something for investors to pay close attention to as the market continues to move away from linear television to streaming entertainment. 

The post Why the Netflix share price plunged 10% on Thursday appeared first on The Motley Fool Australia.

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Tim Katavic 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 Netflix and Walt Disney. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has the following options: long January 2021 $60 calls on Walt Disney and short October 2019 $125 calls on Walt Disney. The Motley Fool Australia has recommended Netflix and Walt Disney. 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.