Bigtincan Holdings Ltd

ASX:BTH

Earnings Call Transcript 2022-Q1

[Jane Morgan]

So good morning. My name is Jane Morgan, and thank you for joining the Bigtincan Holdings Limited September Appendix 4C and Quarterly Report Briefing. Today, I am joined by Bigtincan's Co-Founder and CEO, David Keane; the Global Financial Controller, Cyril Desouza; and our Chief Product Officer, Stefan Teulon, who will discuss the September 2021 quarterly results release with a Q&A session to follow. [Operator Instructions] David, I'll hand over to you.

[David Keane, Co]

Thank you, Jane. And yes, welcome, everybody, to Bigtincan's Q1 FY '22 Appendix 4C quarterly report and update briefing. My name is David Keane, the CEO and Co-Founder of Bigtincan. And together with Stefan and Cyril, we're pleased to have you here today. Now for today's call, we'll be discussing the Appendix 4C that was released to the ASX this morning, together with a presentation deck that we'll be using to support that release also provided to the ASX. Now before I begin, I do want to send my thank you to our entire Bigtincan team, who have again shown their ability to execute, delight our customers and provide value as we build our business. And of course, a big thank you to our amazing customers who put this technology to work in a transformative quarter for our company. Let me start by saying that Q1 of FY '22 was a transformational quarter for Bigtincan as we announced and completed the Brainshark acquisition during the quarter, taking Bigtincan to $100 million ARR leader in our market. Now I'm going to share my slides and take you through the materials for today. So Q1 FY '22 highlights. This was a record Q1 cash receipt quarter for Bigtincan, with cash receipts up 218% versus the prior corresponding period with organic cash receipts up 174%, plus the Brainshark acquisition and integration progress, which you'll hear more about today, marked a successful Q1 for Bigtincan. As we stand here today, Bigtincan is a $100 million ARR company, leading in a global market, well positioned to continue that growth into the future. And I feel that the progress this quarter is a foundation for us continuing that growth into new periods. Now of course, let's talk about where those growth sources have been and what's been behind some of the success in this quarter. Now of course, new customer wins are always important for Bigtincan. And this quarter was a strong quarter for us, which is helpful in a traditionally, seasonally slower period. We added a bunch of new customers, including Alyaxis, Trinetx and Bio-Rad plus Asurion for Content Hub and Learning Hub together in a deal worth circa $2 million in total that came in at the end of the quarter. We had strong expansion in key customers, including Linx Cargo, Ashfield Healthcare and one that I'm a regular user of, Reddit. And in terms of strategic M&A, of course, the Brainshark deal was transformative for Bigtincan during the quarter, taking us close to 2,000 customers in total and that ARR run rate of $100 million. Now in terms of that Brainshark cross-sell and up-sell, the team is off to a strong start with good progress, including, for example, in the quarter, T-Mobile and State Street, both existing Bigtincan customers, purchased Brainshark products through their existing Bigtincan relationships, and we expect cross-sell and up-sell opportunities to accelerate throughout the rest of FY '22. Now one of the things we also like to do with these events is really have -- give our investors a chance to hear why the Bigtincan technology is so important to customers around the world. And today, we're really pleased to be joined by Matthew Wright, who's joining us virtually via a video he's recorded to bring to you today. Matthew is the Executive Director of Global Professional Education and Global Strategic Account Management at Allurion, a leading global medical device company. And Matthew is going to talk to you about why they chose Bigtincan, why it's so important for their future. So I'm going to hand you over to Matthew to take you through their story.

[Matthew Wright]

Hi, everyone. My name is Matthew Wright, and I'm the Executive Director of Global Professional Education and Global Strategic Account Management at Allurion. We use Bigtincan for multiple different reasons within our business. But I suppose one of the most critical things that we use it for is for patient safety. So with a medical device company, it can actually be an issue of life or death if people are not properly trained. And we had a process in place at Allurion where we would go in and visit our health care professionals, be it a surgeon, physician or a nurse, and we would train them using some videos and some hands-on training. But we really felt that this wasn't consistent, and it wasn't accessible at any time, any place. And we really felt that we needed to do more to ensure that our health care professionals are confident and that we were putting patient safety first and foremost. And so this has been an incredibly helpful solution for us to ensure that we have learning on demand and we have information on demand, and we have consistent level of education for our health care professionals. And that really ensures that our patients are safe and also ensures that our business is growing because if we can save patients, we have a business. And so thank you for listening to our story today. And thank you for supporting Bigtincan. Bye.

[David Keane, Co]

And thank you, Matthew, for doing that video for us. I always find it incredibly interesting to see how Bigtincan customers take advantage of our technology. And you heard Matthew talking about the combination of the information and content delivery platform that Bigtincan creates with our Content Hub, with the learning technology in our Learning Hub and how those 2 things work together for Allurion to help them to be able to be sure that they can service their customers and provide them with what they need to be successful in this new digital and remote world. And we're seeing that being something that is impacting our customers all over the world. Now of course, this quarter was transformative for us as a business through the acquisition of Brainshark. And many of you may have attended briefing meetings we conducted at the time for the Brainshark acquisition. But I thought it might be worthwhile just reminding ourselves a bit about Brainshark and why this acquisition has been really influential in how we think about creating that future.So Brainshark was a recognized leader in sales coaching, learning and readiness with around 900 customers and about 180 employees. Interestingly enough, Brainshark was based right here in Waltham, Massachusetts, where I'm talking to you from. And their team is a team of leading experts in how to take these solutions to enterprise customers and solve problems in the fast-growing and global sales enablement market. The platform that has come with the Brainshark acquisition has added new sales readiness capabilities, including content authoring, readiness scorecards, training and onboarding to the Bigtincan solution. And these are industry-leading products recognized by independent awards and market analysts. And of course, these customers come in important key verticals that match Bigtincan's verticals, including healthcare, technology, financial services. And they've been doing this now and proving that they're having that significant benefit for customers for the last several years. Now during this quarter, of course, the process of the acquisition was a really interesting one, and it was really very positive for us to be in a position to be able to come to investors and give you a bit of an update on the progress of that integration. So what have we done in the last very little while since we completed that acquisition? And again, I think the Bigtincan team has executed extremely well. Firstly, we've completed the human resource integration process, including finalization of updated organization structure that combines these human beings together into a single unified structure. We've taken the unified product offering into the Bigtincan multi-hub product strategy, and that enables our customers to purchase technology that came from the Brainshark business under the Bigtincan Learning Hub product umbrella. And that means from October 2021 onwards, Brainshark products have become an offering in the Bigtincan Learning Hub product line. We've also worked really hard to unify systems operations and making sure that we have product support, product and corporate marketing, customer care, the general sales and marketing teams, finance and engineering groups, really aligned together with technology and platforms that make them successful. And we've commenced work on the integration. We'll hear from Stefan Teulon today, our Chief Product Officer, on the progress of that. And we're really excited about what you're going to be able to see the combination of the Bigtincan technology suite with the added capabilities from the Brainshark platform and how we're combining that into our Intelligent Enablement Platform layer that connects each of our product hubs. So talking about the product update, I now want to hand you over to Stefan Teulon, take you through the Bigtincan's product update. Thank you. Stef?

[Stefan Teulon, Chief Product Officer]

Thank you, David, and good to see you all again. I appreciate the opportunity to update you on our product. David, if you could please go to the next slide. So I'd like to kick you off with a quick update on our multi-hub strategy, as we've talked on a few of the technology updates. Previously, this was a tool of our Intelligent Enablement Platform. And the last quarter saw numerous product releases throughout the quarter, but I'd like to call out a few key highlights. It saw Bigtincan's day zero support of Apple's iOS 15. It's a critical device for many of our clients. And so being able to support those iPad and iPhone devices day zero, it puts us in a great position. We saw Content Hub version 5.7 released which brings new enhanced capabilities to creating very buyer-personalized documents, which comes back to our buying experience of the future vision with best-in-class presentation tools. We released a new version of our studio product, version 2, which is our next-generation interactive content creation tool. And Learning Hub saw version 5.19 released, which brings enhanced accessibility improvements and machine-driven translations for some of our global clients as well as new capabilities for live training. Next slide, please, David. I'd like to spend a little time just sharing how the Brainshark integration is going. And it's fair to say that we really hit the ground running with Brainshark immediately adding value to our Learning Hub solution. In terms of bringing those capabilities together, the key initiatives that have already commenced are the 3 on the screen now. So the unified and next-gen UI of the Brainshark application brings it up to alignment with the other Brainshark products -- the other Bigtincan products; a unified user management solution; and a unified data and analytics. Now data for us, combining the Brainshark and our multi-hub strategy, we believe, positions Bigtincan to add value to our customers that our competitors simply can't. Our multi-hub strategy gives us the data to provide new insights and new capabilities. Now to realize that, we're announcing the forming of a new group. Next slide, please, David. The Data Products Group. And this group is headed up by Debra Cancro. Debra Cancro joined us from VoiceVibes and has a deep and rich set of expertise in bringing data products to market. Her experience in voice analytics has immediately brought those capabilities into other parts of the Bigtincan platform. And so we see that really as just scratching the surface of what the data product teams can do. And so I expect many exciting updates in coming announcements. Next slide, please. In terms of industry recognition, this is a great announcement to call out. So Bigtincan is again recognized as the leader in the sales coaching and learning, Aragon Research Globe. I'd like to emphasize the quote from Aragon, just to really underpin the importance of this growth with our clients in today's market. So "In an era of post-pandemic selling, sales organization should deploy dedicated sales coaching and learning platform to improve training and skills." And you can see Bigtincan well cemented in the top right of this globe. We are positioned better than any other to capitalize on this. I would like to hand over to Cyril for the finance update.

[Cyril Desouza, Global Finance Manager]

Thank you, Stefan, and good morning to everyone in Australia, and hello to the rest of the world. Next slide, David. So let's -- so cash collections for the first quarter of FY '22 were $14.4 million. That represented a 218% increase from Q1 FY '21. Operating cash payments were $19.3 million, and that represented a 67% increase over Q1 FY '21 and also a 31% increase over the previous quarter. Now the reasons for the increase in the cash payments were mainly driven for investments in the data products that Stefan just mentioned. There were investments in contractors, system infrastructure, and there was also staff hiring in line with our company forecast. In addition, there were non-capitalized capital-raising costs as well as costs related to the significant acquisition of Brainshark, which happened within the quarter. From a Brainshark perspective, they were not net cash operating positive by just under $200,000, and that was for the period of 8th of September all the way through to the 30th of September. During the quarter, we continued to invest in long-term development projects, and this was highlighted by $2.6 million being allocated to capitalized development costs. We see these essential for the investments in data science, AI and NPL investments, and this accounted for approximately 30% of our total product development spend. Of course, during the quarter as well, we invested in the acquisition of Brainshark, Inc., and that was successfully -- basically, there was a successful placement, a retail and institutional raise, which basically funded the acquisition. As you can see there, we ended the quarter at $55.7 million in cash and cash equivalents, and we are well funded to execute on our growth plans. Next slide, David. Thank you. Historically, Q1 is a low quarter in terms of cash receipt for the company. And that's due to seasonality, and it's due to basically the Northern Hemisphere summer. But as you can see in this quarter, we collected $14.4 million, which, as I mentioned before, was an increase of 218% over the prior corresponding period. Now if we back out the contribution of Brainshark of $2 million and the $1.2 million related to the multiyear deals, the $11.2 million represents the highest that the company has received in a traditionally difficult quarter. And that was driven by a good influx of our new and existing customers we signed up at the end of FY '21 and also within this quarter. And just to note, Brainshark seasonality is pretty much in line with Bigtincan. So we expect this trend to continue going forward. Another note is, going forward, we have disclosed the Brainshark portion. But going forward, as we integrate with the successful integration of Brainshark, we will disclose the numbers on a consolidated basis. That's all for me, and I hope you are well. And back to David.

[David Keane, Co]

Thank you, Cyril. So with a strong baseline from this quarter, coupled with the rapid progress you heard about today on the Brainshark integration, Bigtincan is on track to meet or exceed ARR of $119 million and revenue of $109 million in FY '22. It's interesting as the company continues to step up in scale, with roughly 2,000 deployments now and that growing global team of more than 400 folks working together very well across several continents and time zones. One thing we thought might demonstrate the ongoing growth of the business is we can confirm to investors we now have over 220 customers spending more than $100,000 in ARR with Bigtincan. And this is an important step in showing the company's ability to continue to grow those customers and to win deals at that scale. Now we see opportunities within our existing roughly 2,000 customers to create many more of these $100,000-plus customers and also to continue to gain more of these truly enterprise-scale customers as we continue to grow with new logo wins in the business. And the company is well funded with the cash balance to continue our growth plans as we continue to deliver our focus on long-term shareholder value. So thank you so much for that. That's the material we had for today.