Humanforce’s Takeover Pushes LiveHire into Critical Cash Management Phase

• Operating cash outflows surged 91% quarter-on-quarter to $1.598 million
• SaaS revenue remained flat with a slight 1% decline in ARR to $5.781 million
• Direct Sourcing revenue grew 44% quarter-on-quarter to $0.424 million
• Raised $3.036 million via entitlement offer to cover takeover-related costs and repay loans
• Humanforce increased shareholding to 94.66%, moving towards compulsory acquisition

Quarterly Financial Overview

LiveHire Limited (ASX: LVH) has released its Appendix 4C for the quarter ending 31 December 2024, marking a pivotal period characterized by significant cash flow movements and strategic corporate developments. The company reported a 91% increase in operating cash outflows to $1.598 million, a notable rise largely influenced by a one-off employee bonus payment of approximately $300,000. Meanwhile, cash receipts declined by 32% quarter-on-quarter, impacted by the absence of a one-time payment from the Australian Bureau of Statistics contract that had bolstered the previous quarter.

Revenue and Business Segment Performance

LiveHire’s core Software-as-a-Service (SaaS) segment showed resilience in a competitive Australian market, with annual recurring revenue (ARR) holding steady at $5.781 million, down marginally by 1% from the prior quarter. The company’s net revenue retention (NRR) rate improved significantly to 97% from 87%, indicating stronger customer retention and upsell potential despite flat revenue growth. In contrast, the North American Direct Sourcing business demonstrated robust momentum, with revenue surging 44% quarter-on-quarter to $424,000 and headcount on assignment for key clients increasing by 29%, signaling growing traction in this strategic growth area.

Capital Management and Takeover Developments

To support operational costs and the ongoing Humanforce takeover bid, LiveHire raised $3.036 million through an entitlement offer. These funds were allocated to transaction costs, general administration, working capital, and the repayment of a $2.352 million loan from Lighter Capital, which was settled in early January 2025. Humanforce, backed by private equity firm Accel-KKR, has increased its stake to 94.66% following the takeover offer’s closure on 10 January 2025 and has initiated compulsory acquisition proceedings to secure full ownership of LiveHire.

Strategic Outlook and Market Positioning

LiveHire’s focus on refining its ideal customer profiles and enhancing customer health metrics appears to be paying dividends in terms of retention and growth in the Direct Sourcing segment. However, the flat SaaS revenue and increased cash burn highlight ongoing challenges in scaling the core business amid competitive pressures. The company’s liquidity position remains stable with closing cash of $3.785 million, providing an estimated 2.35 quarters of runway at current operating cash outflow levels. The completion of the Humanforce acquisition is poised to reshape LiveHire’s strategic trajectory, potentially unlocking synergies and capital resources to accelerate growth.

Governance and Related Party Payments

During the quarter, LiveHire paid approximately $317,000 to related parties, covering directors’ salaries, superannuation, and fees. The company has maintained transparency in its financial disclosures and continues to comply with ASX listing rules and accounting standards, with the CFO Alex Panich authorizing the release of this report.

Bottom Line?

As Humanforce moves to full ownership, LiveHire’s next phase will test its ability to convert strategic investments into sustainable growth.

Questions in the middle?

• How will Humanforce’s full acquisition impact LiveHire’s strategic priorities and operational autonomy?
• Can LiveHire reverse the flat SaaS revenue trend amid intensifying competition in Australia?
• What are the prospects for scaling the North American Direct Sourcing business to offset core segment pressures?