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Whispir share price on watch following half-year results

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The Whispir Ltd (ASX: WSP) share price is on watch following the release of the software provider’s first-half results.

Whispir listed on the ASX in June last year in an oversubscribed $47 million IPO. Shares were issued at $1.60 and reached a high of $1.99 in October before trending down.

Whispir shares were trading at $1.46 at close of market yesterday and have remained flat this morning.

Whispir’s business

Whispir provides a SaaS communications workflow platform to enterprise customers. The Whispir platform is used by more than 500 organisations globally to automate interactions between businesses and people.

Telstra Corporation Ltd (ASX: TLS) uses the platform to communicate rapidly with customers and staff, Qantas Airways Limited (ASX: QAN) to manage critical incidents, and New Zealand police to engage with the hearing impaired community. Key markets are Australia, New Zealand, Asia, and the United States. 

Whispir’s first-half results 

Whispir’s first-half revenue increased 20% to $18.2 million from $15.1 million in H1 FY19. Software contributed $17.4 million, up 24% from the prior corresponding period (pcp), while professional services revenue contributed $0.76 million, down 25% from $1.01 million in H1 FY19. Gross profit increased 19% to $11.2 million this half from $9.5 million in the pcp. 

Whispir reports recurring software revenues grew 24% from H1 FY19 to close with annualised recurring revenue (ARR) of $36.7 million. ARR per customer also increased, growing 17% higher to $72.1k. The lifetime value of the customer base as at 31 December 2019 was $222 million, up 26% from 30 June 2019. 

Total operating expenses of $16 million were reported, representing an increase of 9%. $7 million was spent on sales and marketing, $2.1 million on research and development (R&D), and $7 million on general and administration expenses.

Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at -$4.8 million, 26% ahead of the prospectus forecast. Earnings before interest and tax were -$5.9 million, with depreciation and amortisation of $1.1 million reported. 

Whispir reported total current assets of $27.5 million including cash and cash equivalents of $19.1 million. Total assets were $38.5 million. Meanwhile, total current liabilities were $11.4 million, while total liabilities were $15.8 million. With a well-capitalised balance sheet, Whispir is well placed to fund future growth. 

Outlook 

In Asia, revenues grew 26% in H1 FY20 with revenue on track to hit $6.5 million in FY20. Whispir is focused on the Singapore and Indonesia markets, with expansion planned in Thailand and the Philippines.

In America, a new vice president has been appointed to drive growth in what is Whispir’s largest market opportunity. 

Whispir is focused heavily on R&D with $8.9 million in R&D spending forecast for FY20, up from $8.4 million predicted in the prospectus. Of this R&D spending, $4 million will be expensed with $4.9 million capitalised.

Whispir reports that it is on track to achieve its FY20 forecast. 

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Motley Fool contributor Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Whispir Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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