Over the last couple of years, few ASX shares have been in the financial media spotlight more than so-called WAAAX shares: WiseTech Global Ltd (ASX: WTC), Afterpay Ltd (ASX: APT), Appen Ltd (ASX: APX), Altium Limited (ASX: ALU) and Xero Limited (ASX: XRO). These companies’ share prices have all exploded over the last few years, and have been mostly immune to the effects of COVID-19. The Afterpay share price, in particular, has recently soared to unbelievable new highs, surging beyond $100 for the first time in its history just last week.
But there is a new generation of young tech companies that have started making waves on the ASX, due in large part to their abilities to meet the unique demands posed by our new COVID economy. Whether it’s by helping companies automate manual processes or adjust to remote working conditions, these companies are seizing this moment to expand their market share. It’s possible that one day, they may even grow to become the next WAAAX shares.
Could these ASX tech shares form the next WAAAX?
Bigtincan Holdings Ltd (ASX: BTH)
Bigtincan’s flagship sales enablement automation platform is a centralised, integrated software solution that is designed to support businesses throughout their entire sales and marketing lifecycle. This encompasses everything from onboarding and training new staff, to engaging new customers and providing accurate reporting.
Bigtincan delivered strong FY20 results across just about all its key financial metrics. Revenues increased by 56% year on year to $31 million, powered by a 57% jump in subscriptions revenues to $29.5 million. Plus, customer retention levels were a high 89%. With a loyal customer base and high levels of recurring subscription-based revenues, I think Bigtincan is a great company with considerable future growth ahead of it.
Nitro Software Ltd (ASX: NTO)
Nitro develops a suite of software solutions to allow individuals and businesses to streamline and digitise document workflows. This allows companies to create, edit, sign and store important documents entirely online. Not only does this simplify document management, but it can massively reduce printing costs for large companies, and even make them more environmentally friendly.
With more companies now working remotely, demand for Nitro’s digital document management software has increased dramatically. Revenue for the half year ended 30 June 2020 was up 14% against the June half 2019 to US$19.1 million. This was largely driven by a 60% increase in subscription revenue. The ASX tech share reaffirmed its prospectus guidance for total revenue of at least US$40.5 million for the calendar year.
Megaport Ltd (ASX: MP1)
Megaport leverages cloud-based technology to create customisable networks for corporate clients. It helps clients expand their network connectivity beyond the limits of traditional infrastructure, which is something more and more companies are having to do in this COVID-era of remote working.
Megaport’s bespoke networks also give clients the ability to manage their bandwidth usage. They can scale up their consumption needs during peak times, and then only pay for what they actually use during less busy periods.
Despite a recent pullback in the Megaport share price, I believe this ASX tech share has plenty of growth potential over the longer term. The September quarter saw a record increase in customer numbers, and it is now executing on plans to expand into the United States.
FINEOS Corporation Holdings PLC (ASX: FCL)
FINEOS develops a suite of software for the life, accident and health insurance industries. Its AdminSuite platform is a centralised system that supports billing, claims and payments. Its customer-centric software automates and streamlines processes for insurance providers and can replace legacy insurance administration platforms.
The FINEOS share price has soared over 80% higher already this year after it achieved a number of significant milestones, including signing the biggest insurance company in the US, Prudential Financial Inc (NYSE: PRU), to its platform.
Whispir Ltd (ASX: WSP)
Whispir develops integrated communications software for corporate clients. It provides a central platform from which its customers can create customisable templates for email, web and social media communications, as well as manage workflows and drive insightful reporting.
The September quarter was the company’s strongest on record in terms of cash receipts, with the ASX tech share bringing in $10.5 million. The company expects full year revenues for FY21 to grow by at least 21% over FY20 to between $47.5 million and $51 million.