Communication platform Whispir Ltd (ASX: WSP) announced annualised recurring revenue of $60.0 million in its second-quarter update ahead of half-year results on February 22.
The market has been somewhat muted in its response, with the Whispir share price down just 0.77% to $2.58.
Watchlist Wednesday: Whispir Ltd (ASX: WSP)
Pandemic provides temporary bump
Key highlights from the second quarter ending 31 December include:
- Annualised recurring revenue (ARR) of $60.0 million, up 26.6% on year-on-year (YoY)
- Cash receipts of $25.4 million, 56.2% higher than Q1 and 124.6% higher YoY
- Cash outflows of $28.6 million, a 49.0 increase YoY
- Cash on hand of $38.1 million
The bump in customer receipts was primarily the result of increased usage by government clients to manage COVID-19 communications.
This is likely what led to Whispir upgrading its revenue guidance for the FY22, but keeping its annual recurring revenue guidance unchanged.
The pandemic will abate at some point, therefore this revenue will drop off in the short-term.
“Enabling our customers to manage their COVID responses and communications has contributed to our improved performance this quarter… [but] use cases go far beyond the needs of managing COVID, particularly as we become embedded in our customer’s operations”
Despite the record cash receipts, Whispir incurred a cash outflow of $3.1 million for the quarter as it invested in its direct sales team and platform.
Assuming the same cash burn rate, Whispir has sufficient cash for twelve more quarters.
New sales team making waves
Whispir’s decision to centralise its sales team is paying dividends early.
The company recorded a 119% jump in new customers in Q2 compared to the prior year.
In other words, it more than doubled new customers YoY.
The company also recently announced a partnership with multi-country telco Singtel as a reseller and customer.
ANZ signed 74 new customers. Meanwhile, North America is gaining momentum adding 34 new customers including a major insurance provider.
Asia added another 19 customers as it continues to recover from the pandemic.
More than text messages
Whispir shared one of its new product features, Tone of Voice.
It allows customers to craft SMS messages that reflect the brand and unique personality of the company, providing more engaging content.
Chief Product Officer Brad Dunn has previously stated customer pain points is audience engagement:
“We don’t care about sending messages, we actually need people to read them”
My take
A solid result by Whispir, which is clearly building momentum into 2022 given the jump in new customers and customer usage.
But how much of that is temporary? And how much is enduring?
Additionally, the business is still burning through cash.
To justify the outflows, it will need to continue to execute and increase ARR towards the critical $100 million mark.
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