LiveHire Limited

Accelerated Growth in Talent Community Connections:LiveHire Limited (ASX: LVH) is a talent technology company and offers its services under two segments, namely, business intelligence and data services.

Issue of Performance Rights & Buy-Back: Under the employee incentive plan, the company recently updated that it has issued 174,948 unquoted performance rights to the senior employee of the company. As a part of the Employee Incentive Plan (EIP), the company completed the cashless buy-back of 6,966,390 ordinary shares which were subject to loan-back arrangements under the EIP. There was no impact of the buy-back on the company’s cash position.

Partnership with Bayard: The company recently signed Referral Partner Agreement with Bayard. This involves an offering of the company’s innovative talent management platform to Bayard’s clients. The latter will also promote LiveHire to its clients, enhancing the company’s brand and accelerating sales growth in the United States.

Partnership with Rizing: The company also entered into another partnership with Rizing, a leading global SAP Success Factors implementor. This partnership will strengthen the company’s position in the market, through the acceleration of sales growth in the Asia Pacific and the United States.

Growth in Talent Community Connections:Recently, the company came up with an update, notifying that it has surpassed critical mass of 1 million Talent Community Connections (TCC). The growth in TCCs accelerated rapidly, with more than 2 lakh connections being added in a period of 4 months.


Growth in TCCs (Source: Company Reports)

March Quarter Highlights: During the quarter ended 31 March 2019, the company reported annualised recurring revenue amounting to $2.47 million, growing 20% QoQ. Annualised recurring revenue per client stood at $35,752, representing QoQ growth of 12%. Cash receipts for the period were recorded at $933,000. The period was marked by entry into the US market, with 5 client implementations through the partner channel.


Key Metrics (Source: Company Reports)

Stock Recommendation: The stock of the company generated negative returns of 31.65% and 44.90% over a period of 1 month and 3 months, respectively. The recent partnerships with Bayard and Rizing have provided the company with a greater market presence and accelerated sales growth in Asia Pacific and the United States. In addition, the company seems to be growing remarkably in terms of Talent Community Connections, as suggested by the recent update regarding the achievement of 1 million connections, which is a key indicator of client ecosystem growth and candidate adoption. Currently, the stock is priced close to its 52-week high level of $0.260 and has a market capitalisation of ~$78.31 million. Hence, considering the above factors and current trading levels, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.270 per share, (traded flat on 14 August 2019).

LiveTiles Limited

Rapid Growth in Annualised Recurring Revenue:LiveTiles Limited (ASX: LVT) is engaged in the development and sale of digital workplace software.

Co-Selling Arrangement: The company is selling its June 2019 launched AI cyber-security solution through partners and the co-selling arrangement with Microsoft in 39 countries. The company is actively selling its technologies alongside Microsoft to enterprises across North America, Asia Pacific, Europe, and South America.

Key Financial Highlights: As at 30 June 2019, the company reported annualised recurring revenue amounting to $40.1 million, reporting an increase of 167% in the last 12 months. Average annualised recurring revenue per customer continued to trend higher in the June quarter and reported a growth of 56% over the last 12 months. At the end of the period, the company had 919 paying customers, representing ongoing substantial enterprise customer base growth. During the June quarter, customer cash receipts amounted to $7.9 million, rising 52% on the previous quarter and 130% on the prior corresponding period.

 

ARR Per Customers (Source: Company Reports)


ARR Growth (Source: Company Reports)

Operational Highlights: During the June quarter, the company launched an AI-enabled intelligent search platform with strategic partner Search365. The period also saw the company partnering with Microsoft for the global launch of home sites. In addition, the company launched LiveSmiles with Microsoft Australia, its intelligent corporate wellness product.

Outlook: FY20 is expected to be another year of strong customer and revenue growth driven by continued investment into products, sales and marketing and partners. The company has an objective to deliver ARR of least $100 million as at 30 June 2021.

Stock Recommendation:The stock of the company generated returns of 36.62% over a period of 6 months. During the June quarter, the company witnessed rapid growth in ARR, with an uplift of 167% in the last 12 months. ARR per customer also continues to trend higher on the back of growth in customer base, increased penetration of the employee base of existing customers and product cross-selling & bundling. Through its partner channel, the company is driving its AI-cyber security solution into both new and existing customers. The co-selling arrangement with Microsoft solely involves the extension of the solution in 39 countries. In addition, the company expects to deliver strong performance in FY20, along with a target of delivering $100 million ARR as at 30 June 2021. Currently, the stock is trading slightly below the average of 52 weeks high and 52 weeks low price of $0.670 and $0.275, respectively. Hence, considering the aforesaid facts and current trading levels, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.480, down 1.031% on 14 August 2019.

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