The Bigtincan Holdings Ltd (ASX: BTH) share price is charging higher following the release of its fourth quarter update.
At the time of writing the sales enablement automation platform provider's shares are up 6% to 98 cents.
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How did Bigtincan perform in the fourth quarter?
Bigtincan continued its strong form in the fourth quarter and recorded customer cash receipts of $10.4 million. This was an 89% increase on the prior corresponding period.
As a result of this strong finish to the year, Bigtincan's annualised recurring revenue (ARR) grew 53% in FY 2020 to $35.8 million. This means that its ARR has now grown at a compound annual growth rate of 50% over the last five years.
On an organic basis, the company's ARR grew 40% for the year to $32.7 million. Management believes this demonstrates the ongoing strength of the organic growth engine at Bigtincan.
CEO and Co-founder, David Keane, commented: "Bigtincan closed FY20 with a strong quarter, achieving a total ARR as at 30 June of $35.8m, up 53% from 30 June 2019, with organic ARR growth of 40% to $32.7m and a 5-year CAGR of 50%, demonstrating the ongoing success of our organic growth engine, together with the benefits of strategic M&A activities."
At the end of the fourth quarter, Bigtincan had cash and cash equivalents of $71.9 million. This was boosted by a $35 million institutional placement and a $7.5 million share purchase plan during the quarter.
Positively, the company advised that it saw no impact on payment terms from enterprise customers during the pandemic. Nor did it have extended potential bad debt exposure.
Market commentary.
In addition to its results, the company provided investors with an update on how the pandemic is impacting its market.
The good news for Bigtincan is that the International Data Corporation expects spending on the digital transformation of business practices, products, and organisations to continue at a solid pace despite the challenges presented by the pandemic.
Management notes that the focus on digitisation and Bigtincan's unique strength in mobility, provides it with opportunities for tailwinds going into FY 2021.
In light of this, it appears confident that it is commencing the new financial year well positioned for future growth.
Finally, the company continues to expect to deliver on its 30% to 40% organic revenue growth in FY 2020 with a stable retention rate.
