“Global mega trends of digital transformation” behind Whispir's record half

Cloud computing Software as a Service (SaaS) provider Whispir’s (ASX: WSP) position in the global market for digital tools has pushed its revenue to record levels in the first half, up 70.4 per cent on the prior corresponding period.

The company generated $39.4 million in the six months to 31 December 2021, up from $23.1 million in 1H21, and cut its losses in half on the back of strong tailwinds according to CEO Jeromy Wells.

“The global mega trends of digital transformation are providing strong tail winds, as our established customer base continue to expand use cases and enhance the way they communicate,” Wells said.

“It is clear the market is recognising the benefits of the Whispir platform, evidenced by the acceleration in revenue growth in the first half of the current financial year, with ARR (annualised recurring revenue) increasing 26.6 per cent on the previous corresponding period, to $60.0 million.”

Whispir, which provides customers with cloud-based communications and workflow management solutions, saw ARR rise by 26.6 per cent to $60 million in the half, and says the trajectory over time is “one of steady, high growth” - with a compound annual growth rate (CAGR) of 29.4 per cent since 1H19.

In addition to strong gains in recurring revenue, Melbourne-based Whispir says performance was boosted by “significant pandemic-related transaction revenue” after the company partnered with major healthcare providers to deliver personalised communications during Australia’s COVID-19 response.

The company posted another net loss after tax in the half of $3.46 million - up 102.4 per cent on 1H21.

On a regional basis, most of the company’s revenue is being generated in ANZ ($35.2 million), backed by high-value contracts with government departments and related agencies.

In Asia, revenue was down 9.2 per cent to $3.2 million - primarily the result of negative business sentiment surrounding the pandemic with existing customers electing to defer campaigns while in North America revenue rose by 60.7 per cent on the PCP to $1.1 million.

“North America represents our largest market opportunity and momentum is building with a pipeline of high-value customers,”Whispir said.

“The focus on targeted personas through the first half of FY22, resulted in double-digit growth in customer numbers and significant contract signings - particularly in the segments of government, insurance and marketing.”

The company says it enters the second half of the financial year in a strong position, with cash of $38.1 million, no debt, and line of sight to cash flow breakeven in the next two years.

“These strong results are an endorsement of our go-to-market strategy and our investment in building strong customer and channel partner relationships,” Wells said.

“Our industry-leading low revenue churn of just 1.8 per cent and strong net customer revenue retention supports our growth trajectory and gives us confidence in our ability to deliver on our upgraded guidance numbers for FY22.”