Tech: Bigger is better for B2B software platform JCurve as shares get a boost

There’s been plenty of ups and downs in ASX small caps to end the month, as trading updates for the December quarter come rolling in.

But one winner this morning was tech minnow JCurve Solutions (ASX:JCS), which rose almost 15 per cent after a positive trading update.

The company said sales in the six months to December 31, 2019 hit $6m — a gain of 15 per cent from the same period of 2018.

The bulk of those sales — $4.1m — were derived from the company’s Australian operations. But the company also landed two new contracts from Asian customers, which boosted revenue from that segment to $700,000 from $0 the year before.

Closer to home, JCurve said it was reaping the benefits from a pivot to focus on quality over quantity — larger contracts for a smaller number of customers.

JCurve operates as a global partner of Netsuite, the enterprise resource planning (ERP) software platform.

The company’s core product offering is as the exclusive provider of JCurve ERP, a version of the Netsuite software specialised for small businesses.

JCurve said momentum in its Australian division was driven by a shift towards “larger more complex NetSuite solutions with longer sales cycles”.

That meant a reduction in the number of new clients, but a 25 per cent increase in the size of each new contract. The resulting dynamic allowed the company to maintain sales growth with a reduced level of customer churn.

The company held $3.7m of cash at the end of December, down slightly from June 30 which it attributed to seasonality in the nature of its software contracts. JCurve has a current market cap of around $8m.

JCurve said its future cash position would be bolstered by the fact it has $1.9m of signed contracts on its books, which will be invoiced annually over a period from 12 to 60 months.

“These longer term contracts provide further comfort regarding the ongoing strength of the company,” JCurve said.

In other ASX tech news this morning:

There’s been another update from embattled payments company iSignthis (ASX:ISX), which has been placed in suspension by the ASX since October. The company subsequently launched legal action in the Federal Court against the ASX concerning the suspension.

This morning, the ASX said it’s now considering iSignthis’ response to its own draft findings about the company, which the bourse received on January 24 after giving the company more time to lodge its submission. However, given the matter is now before the court (proceedings scheduled for February 7), the ASX said it would “not be responding individually to any further communications concerning the suspension”.