The Whispir Ltd (ASX: WSP) share price is on the move today following the release of its full year results.
At the time of writing the communications workflow platform provider's shares are down 6.5% to $4.47.
How did Whispir perform in FY 2020?
Whispir was on form in FY 2020 and delivered a result ahead of its prospectus forecasts.
For the 12 months ended 30 June 2020, the company delivered a 25.5% increase in revenue to $39.1 million and annualised recurring revenue (ARR) growth of 34% to $42.2 million. This compares to its prospectus forecast of $37.8 million and $42 million, respectively.
This strong growth was driven by increased usage and a greater than forecast increase in net new customers during the 12 months. Whispir finished the period with 630 total customers, up 120 and ahead of its target of 621.
Also coming in better than its prospectus forecast was its churn levels. Gross revenue churn reduced to only 2.4%, while customer churn was lower than forecast at 7%.
Total operating expenditure was $31.7 million for the year, leading to an EBITDA loss of $7.3 million. This was also better than its prospectus forecast for an EBITDA loss of $9.4 million.
At the end of the period the company's balance sheet was strong, with a net cash balance of $15.2 million.
What were the drivers of its growth?
Whispir's CEO, Jeromy Wells, was rightfully very pleased to see the company exceed all its key prospectus metrics.
He commented: "Whispir's strong performance in its first full year as a listed company has ensured we have achieved or exceeded all key Prospectus metrics. Increased platform usage from our existing customer base was the key revenue growth driver in FY20, delivering total annual revenue of $39.1m, up 25.5% YOY and 3.3% ahead of our Prospectus Forecast."
The majority of its revenue continues to be generated in the local ANZ market, but is being supported by other regions.
"The more mature Australia and New Zealand (ANZ) business continues to perform ahead of expectations, currently accounting for around 79% of total group revenue. Meanwhile, our operations in Asia are rapidly growing with revenue increasing 44% YOY to $6.8m."
And although the chief executive acknowledges that the pandemic gave its performance a boost in FY 2020, he appears confident that this isn't a short-term thing.
Mr Wells explained: "While COVID-19 provided a tailwind for the business, it really just accelerated the macro trend for the adoption of easy-to-use yet sophisticated communications software."
"As businesses respond to rapidly changing operating requirements, they need to be able to communicate with all their stakeholders; employees, suppliers and customers, more effectively and Whispir has satisfied that demand," he added.
The chief executive also notes that the second half surge in demand has not yet been fully reflected in its results.
"Significant new customer growth in the second half is yet to have a material impact on revenue and ARR. Most new customers start by quickly deploying Whispir for one or two use cases that meet an immediate need. However, our experience shows that new customers quickly appreciate the significant benefits our cutting-edge communications workflow platform delivers, which inevitably leads to increased transactional volumes as customers deploy additional use cases," he explained.
Outlook.
While the company acknowledges that there is a high level of uncertainty in the current economic and business environment, it remains positive on its prospects in FY 2021 and has provided guidance for the year ahead.
In FY 2021 Whispir expects to deliver ARR of $51.1 million to $55.3 million and revenue of $47.5 million to $51 million. The high end of these guidance ranges represent year on year growth of 31% and 30.4%, respectively.
The company is also forecasting the narrowing of its loss to an EBITDA loss of between $6.2 million to $4.8 million. The latter will be an improvement of 42% or $2.5 million.
