With 2020 now (thankfully) drawing to a close, it’s worthwhile looking back on some of the ASX shares that have outperformed this year. There are many ASX companies that have demonstrated their resilience and agility by delivering strong revenue growth despite the challenging market conditions created by the COVID-19 pandemic.
Furthermore, one could argue the way in which these companies have responded to the crisis could help ensure they have even greater success in the future.
Yesterday, I wrote about how corporate bookmaker Pointsbet Holdings Ltd (ASX: PBH) continued with its aggressive expansion strategy into the United States market throughout 2020 – despite the threat COVID-19 restrictions posed to its business model. And now, with the prospect of a vaccine buoying markets globally, Pointsbet is seeing a sharp rise in its share price.
Here are three other ASX tech companies that have been proactive in their responses to the various challenges posed this year – and may even grow into tomorrow’s market darlings because of it.
Nitro Software Ltd (ASX: NTO)
Under-the-radar ASX tech share Nitro develops a suite of software solutions that allows individuals and businesses to streamline and digitise document workflows. The company’s software helps businesses create, edit, sign and store important documents entirely online, reducing the need for traditional forms of hardcopy file management.
As you can imagine, demand for this type of software solution soared during the pandemic, as many companies were faced with the new challenge of managing workflows for a widely dispersed workforce operating in lockdown. Nitro also made the extremely canny decision to give away its eSignature solution for free throughout 2020 to help support companies as they transitioned to working from home.
Results for the most recent quarter, ending 30 September 2020, were positive across just about all financial metrics. Cash receipts from customers increased by 17% quarter on quarter to $11.6 million, and subscription annualised recurring revenues (ARR) were all ahead of prospectus forecasts. The company also ended the quarter with a strong balance sheet, comprising $44.4 million in cash and no debt.
The Nitro Software share price has shot up almost 80% so far this year.
Megaport Ltd (ASX: MP1)
Megaport has been another surprising ASX tech share success story in 2020. This innovative company gives corporate clients the flexibility to manage their bandwidth usage. Customers can scale up their bandwidth when demands are high, and then reduce consumption during off-peak times. The platform also leverages cloud-based technology to expand company networks beyond the reaches of traditional infrastructure.
As was the case with Nitro, the unique working arrangements companies have been forced to adopt as a result of the COVID-19 pandemic have put Megaport’s services in high demand. The company’s annual revenues jumped 66% year on year to $58 million in FY20. And, after executing two successful capital raisings, Megaport ended the financial year with a cash position approaching $170 million.
The company has carried a lot of that momentum into FY21. Although quarter-on-quarter revenues only grew a modest 2% to $17.3 million, Megaport reported a record quarterly increase in customer numbers with most of that growth coming from the US.
Despite a recent pullback, the Megaport share price is still up close to 30% in 2020.
Whispir Ltd (ASX: WSP)
Small cap ASX tech share Whispir develops software that helps companies manage their communications workflows. It has created a centralised platform where its corporate customers can create high quality, customisable templates for email, web and social media communications, as well as drive insightful reporting.
Use of Whispir’s platform accelerated during lockdowns, as companies sought greater control over business-critical communications workflows. Whispir responded proactively to the crisis, developing a number of standardised COVID-19-related templates to assist its clients with meeting their communications obligations with staff and customers during the pandemic.
The company’s first quarter FY21 results continued to build on the positive foundations laid throughout FY20. Whispir announced that, during the three months ended 30 September 2020, it had added a record 35 new customers and brought in $10.5 million in cash receipts.
The Whispir share price has skyrocketed over 100% higher so far in 2020.
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Returns as of 6th October 2020
Rhys Brock owns shares of MEGAPORT FPO, Nitro Software Limited, Pointsbet Holdings Ltd, and Whispir Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO and Whispir Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia has recommended MEGAPORT FPO, Nitro Software Limited, Pointsbet Holdings Ltd, and Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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