A look at an emerging SaaS minnow – Whispir

Summary

• Global-scale SaaS provider, Whispir added an extra edge to its leadership executive roles with New CFO and AI and Data Head.
• EBITDA for FY2020 results of Whispir is expected between negative $7.9 million and negative $7.4 million for the FY2020 results, marked by the consolidation of stronger than forecast revenue and operating expenditure being lower than expected.
• Addition of 49 net new customers amid COVID-19 with a boost in platform usage by both existing and new customers
• Whispir enabled business-critical COVID-19 interactions with improved productivity and operating efficiency via roll out of various strategies such as joint go-to-market strategy and developed 12 COVID-19 workflow templates.

Cloud computing has emerged from innovation to technological lifeblood that is running through modern enterprises offering pros such as cost savings, security, efficiency, and remote accessibility. Cloud computing is a technology wonder holding its significance in relatively every space that one can even think of.

Cloud computing offers an array of service models such as IaaS, PaaS, SaaS that grant the customers to choose the right service model that fits their needs. The environment is volatile, and businesses today are changing their approach from one size fits all, to specialist service providers focused on their business position. They look for a unified platform to maintain proper communication via email, text messaging, web chatting, and other communications channels.

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Hey! Do you want to hear the good news in the first week of the new month? Whispir Limited (ASX:WSP) share price kicked off the month, with an increase of 7.627 per cent at a price of $2.54. However, on 2 June 2020, WSP was trading at $2.48, decreasing by 2.362% (at AEST 2:51 PM), with a market cap of $263.57 million.

On 2 June 2020, WSP notified the market on hiring Mr Justin Owen for the designation of CFO (Chief Financial Officer) along with a new head for AI and data, Ms Fiona Milne.

Interestingly, the stock ending in green on Monday was backed by the announcement of a trading update on 1 June 2020 discussed in the following article.

Are you surprised that how can a small company which is relatively new on the ASX listing with a market capitalisation (on 1 June 2020) of $244.89 million witnessed a rise in its share price on 1 June?

Well, during the time of this economic turmoil, this SaaS provider has enabled critical business interactions with improved productivity and operating efficiency, but how?

The provider has rolled out various strategies such as joint go-to-market strategy and development of 12 COVID-19 workflow templates.

On this positive note, lets deep dive into a SaaS platform provider which is emerging out of the woods.

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Australian SaaS Platform

An Australian, 2002 founded software-as-a-service (SaaS) Company, engaged globally in the business of providing communications workflow platform to its clients that facilitates automatised interactions between companies and people such as employees, customers, suppliers, job applicants, and other stakeholders.

Usage of cutting-edge technology by this cloud-based service provider aids email, web chatting, text messaging and other communication channels reachable together in a unified space.

A catalyst of growth – Global customer base

A global operator, Whispir has broad customer base inclusive of the world’s most renowned brand The Walt Disney Company, others are: Virgin Australia Group, Fire and Rescue New South Wales, Department of Jobs and Small Business, AGL, Takata Airbag Recall, etc.

Let’s enrich ourselves with the trading update:

As announced on 1 June 2020, the Company now expects its earnings before interest, tax, depreciation and amortisation (EBITDA) to be in the range of negative $7.9 million and negative $7.4 million, in the FY2020 results. This range is materially ahead of the prospectus forecast of negative $9.4 million by the Company. This lift is consummated by a mix of stronger than forecast revenue and operating expenditure being lower than expected.

The Company is expected to release its results and audited Appendix 4E for FY20 on or around 26 August 2020.

WSP’s share price has shown a robust performance during the recent months amid the pandemic, hit lowest on 23 March 2020 with $0.705 and closed at $2.540 on 1 June 2020.

Let us have a look at the impressive performance in Third Quarter (Q3) of FY20

Operational performance

WSP witnessed a massive growth of 49 net new customers inclusive of multiple government departments and agencies during the quarter ended March 2020, which brought the total customer base to 558, featuring an inflates usage of its platform. This inflation in growth is due to the rising demand for communications software caused by the COVID-19 pandemic, and the readiness of Whispir’s new easy-to-use templates contribution towards the new customer base.

Financial performance

WSP saw a growth in its annualised recurring revenue (ARR) grew by 10.4 per cent to $40.5 Million, in comparison with the quarter ended December 2019 (Q2 FY20). Also, the net cash that was used in the operating activities was $1.4 million, down from $1.2 million in Q2 FY20.

Also, Quarterly customer cash receipts were consistent with the estimates and stood at $9 million along with the cash and cash equivalents of $16.7 million at the end of Q3 FY20.

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Whisper’s strategies during this time of turmoil

With the aim of driving growth in customers and revenue, numerous strategies were followed by WSP during the COVID-19 such as Implementation of Joint Go-To-Market Strategy with Telstra Corporation Limited (ASX:TLS) offering WSP’s ready-to-use template to enterprises, categorised as one of its top 5 COVID-19 business resilience solutions, whereas StarHub is offering the Company’s pre-defined templates to its clients in the Asian region.

Also, Development of 12 COVID-19 workflow templates by Whisper- aims to assist businesses with their critical communications during this pandemic.

Twenty-two government agencies including ambulance services (3 jurisdictions), police services (4 jurisdictions), Queensland Corrective Services, Queensland Department of Transport and Main Roads, and the Victoria Department of Health and Human Services (DHHS) are using WSP platform for COVID-19 communications.

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WSP’s capital-light business model, recurring revenue growth model, wide customer base and communications workflow platform evolution makes it an interesting stock to look out.

NOTE: $ used in the article refers to Australian dollar unless stated otherwise.