Bigtincan

I’m super impressed with Bigtincan (BTH) which is home grown software-as-a-service company targeting the US market.  Their mobile tablet and mobile phone targeted, sales enablement software closely integrates with global leading CRM software SalesForce and pushes the most relevant internal sales/product content out to sales reps while accurately tracking prospective client engagements.  

The product Bigtincan has artificial intelligence (AI) functionality enabling the sharing of the better content (PowerPoint, word, PDF, video) used by leading sales representatives within organisations.  The sales enablement software category is attempting to move the art of enterprise sales into a science of sales.  The recent BTH move into learning also makes allot of sense to me.   

I like the fact that BTH from little old Sydney, Australia has grown its revenues in the United States, the home of technology.  I’m also very impressed the company has built a channel of some 22 resellers including major telcos.  The blended use of a direct sales force (circa 35 sales staff internally) and resellers sets the company in good stead when sales enablement gets more widespread recognition as an invaluable sales aid.

Sales enablement is an emerging software category with BigTinCan’s major competitors largely being VC funded startups with revenue bases typically less than 20 million USD.  This class of software is still early in its journey with the likes of IT consultant Gartner tentatively covering sales enablement in some of their literature but yet to formally present their famous magic quadrant graphs for participants in the sector.  

Bigtincan is rated strongly by Aragon Research, as are competitors Clearside, Savo (claim to be the most widely used system with 1 million users, winning numerous awards), Seismic (claiming 300 employees and growing its business 872 percent 2013-2016) and Showpad (claiming 1000 companies use their product).

From what I can understand the key functionality Bigtincan brings to its customers sales force includes:

• Easy and intuitive Apple styled navigation around most relevant sales/product content.
• Software which pushes relevant internal sales content material into mobile environments for sales reps to easily access and distribute freeing up time to engage with prospects.
• Software which compresses a variety of files types, making them more easily accessible and used.
• Software which tracks sales representatives email, mobile phone and content engagement with clients and prospects.
• AI software enabling the sharing of better content as determined by analysis of Salesforce data in combination with the analysis of content tracking functionality.
• Software which sales managers gain greater insight into activities of sales reps.
• Highly secure environments.

Bigtincan’s success has been in the USA through the combination of direct and encouragingly reselling channels.  BTH is ideally set up for the opening up of the US sales enablement market in the coming years.  

Investors today are getting an annualised monthly recurring revenue base at 31 December 2017 of circa $12.8 million and an indicative cost base of $16 million AUD, acknowledging the lumpiness in the cash receipt of revenues (Multi year, annual, quarterly subscription deals).  

The company grew annualised monthly recurring revenues (AMRR) 53% in 2017 (year to 30 June).  BTH has potential to become cashflow positive in the next 12 months (31 December 2018).  At this time (should it occur) the current cash reserves ($11.6 million as at 30 September) may have halved ($5.8 million) and using the current shares on issue (176.34 million) and current share price (24 cents), investors are getting a cash-flow break-even SaaS company growing at more than 35 percent  per year on an enterprise value to sales ratio of circa 2.3 times historical revenue (historical  AMRR at 31 December 2018) falling to 1.7 times AMRR for 2019 CY if sales growth continues at same rate.

BTH is however a tiny SaaS company so comparing it against larger, more commercial US listed SaaS peers is problematic.  A recent report showed SaaS companies growing their revenues 30 to 40 percent per year were trading on EV/Revenues of 8.2 times for 2017. Another pricey listed company in an adjacent space offering a more comprehensive sales suite is Callidus Software Inc (CALD).  It offers a suite of Software-as-a-Service solutions that identifies leads, trains personnel, implements territory and quota plans, enables sales forces, automates configuration pricing and quoting, manages contracts, streamlines sales compensation, captures customer feedback and provides predictive analytics.  Callidus Software trades on an EV/Revenues of 7.3 times for 2017, while the gorilla in the room SalesForce (CRM) trades on EV/Sales (to 31 January 2018) of 7.1 times.    

The upside is evident with cashflow breakeven the next major milestone.