It has been yet another positive day of trade for the Livetiles Ltd (ASX: LVT) share price.
At lunch the digital workplace platform provider's shares are up almost 12% to an all-time high of 67 cents.
Incredibly, this latest gain means that LiveTiles' shares have now gained 148% in the space of just two months.
Why are its shares surging higher today?
This morning the company released its second-quarter update which revealed that annualised subscription revenue (ASR) has reached $6.9 million as of December 31 2017.
This compares to ASR of $5 million in the September quarter and $2 million a year earlier, meaning year-on-year growth of 245%.
This ultimately led to cash receipts in the December quarter of $0.9 million, up 80% on the prior corresponding quarter. Though, net cash outflow from operating activities was $5 million during the quarter.
The key driver of this impressive ASR growth has been a strong increase in customer numbers. The company finished the quarter with 445 paying customers on its books, up 67% from this time last year.
These customers include a multinational media conglomerate headquartered in the United States, one of the world's largest investment managers, a major airline headquartered in the Asia-Pacific region, and a leading insurance company headquartered in the United Kingdom.
Another driver was its strong retention levels. LiveTiles' net customer retention for the 12 months to 31 December 2017 was 135%, meaning that expansion with existing customers significantly exceeded customer churn.
Looking ahead, LiveTiles' expects that its joint promotional activity with Microsoft in the artificial intelligence space will support significant subscription revenue growth in FY 2018 and beyond.
Should you invest?
There's no doubt that LiveTiles' shares are expensive right now and therefore come with higher than normal risks. But if your risk profile is okay with this, then I think LiveTiles could prove to be a great long-term buy and hold investment alongside industry peers Appen Ltd (ASX: APX) and Altium Limited (ASX: ALU).
