In morning trade the Whispir Ltd (ASX: WSP) share price is storming higher.
At the time of writing, the communications workflow platform provider's shares are up 4% to $4.10.
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Why is the Whispir share price storming higher?
Investors have been buying Whispir shares this morning following the release of its second quarter update.
According to the release, Whispir had a strong second quarter with annual recurring revenue (ARR) increasing 29.2% over the prior corresponding period to $47.4 million. This was also an 8.5% increase on its first quarter ARR.
Management advised that this was driven by ongoing demand for communications software to automate processes and improve stakeholder engagement.
This was predominantly from existing customers, which are increasing their platform usage to solve communications challenges. Though, the addition of 42 net new customers during the quarter also boosted its ARR. Whispir now has a total of 707 customers, which is currently ahead of FY 2021 expectations.
Another positive was that the combination of revenue growth and optimal management of working capital delivered Whispir's first operating cashflow positive quarter. Operating cash flow came in at $0.4 million for the three months.
At the end of the period, Whispir had a cash and equivalents balance of $10.9 million.
Whispir's CEO, Jeromy Wells, commented: "Whispir is benefitting from existing customers continuing to increase their usage of the platform to improve internal and external communications and digitise their operational processes. Many organisations are evolving processes to cater to new operating environments, which require more integrated communications with internal and external stakeholders."
"Strong revenue growth from our install base reflects the long-term nature of our customers, now supported by a larger customer success team. We're seeing more organisations looking to implement our versatile and easy-to-use technology platform that can be used by multiple departments for a broad range of communication solutions," he added.
Outlook
Management advised that it continues to expand its footprint across its three key regions and remains on track to achieve its FY 2021 guidance.
Furthermore, it notes that its ANZ and Asia operations continue to perform well, and the recently released North American strategy is preparing the company for long-term growth in the region.
Whispir is targeting ARR of $51.1 million to $55.3 million in FY 2021. This represents ARR growth of 21% to 30% year on year.
