Whispir (ASX:WSP) share price up 6% on solid FY21 result

Here’s how Whispir performed in FY21…

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The Whispir Ltd (ASX: WSP) share price is climbing this morning. This follows the cloud-based communications company releasing its full-year results for the 2021 financial year.

At the time of writing, Whispir shares are up 5.93% to $2.50. It has been a challenging year for the Whispir share price. It’s dropped 36% since the beginning of 2021. However, in the past 5 days, the company’s value has crept up 10.8%.

Whispir share price in focus following double digit revenue growth

Here are the highlights from the company’s full-year results:

  • Annualised recurring revenue up 28.5% to $53.6 million
  • Recurring revenue now represents 96.7% of total revenue, up from 95.6% in FY20
  • FY21 revenue of $47.7 million, up 22% from the prior corresponding period
  • Operating earnings before interest, tax, depreciation, and amortisation (EBITDA) loss of $4.7 million, up from a loss of $5.6 million in FY20
  • Net loss after tax of $9.65 million, a 2% improvement on FY20
  • Net new customers of 171 during the financial year, bringing the total to 801 in FY21

What happened in FY21 for Whispir

The market is responding positively to the Whispir share price on Wednesday after the company released its full-year results for FY21. Growth metrics across the board were solid, with most financial measures indicating an increase of 20% to 30% from the prior year.

According to the release, Whispir achieved total revenue of $47.7 million in FY21 – representing an increase of 22% from the previous year. Similarly, annualised recurring revenue grew by 28.5% to $53.6 million.

This growth was underpinned by the increased usage of existing customers. In addition, new customers — to the tune of 171 across Whispir’s operating regions — pushed the company’s top-line result higher.

Looking at the geographic breakdown of performance — Australia and New Zealand delivered growth of 29% to $39.7 million. Meanwhile, the company’s Asia and North America segments shrunk by 1% and 12% respectively.

Fortunately, the latter geographies are smaller in revenue terms to begin with. However, the challenging international growth environment may be an eyebrow-raiser for some investors.

According to Whispir, the challenging international environment reflects the impacts of COVID-19 and a pivot in its marketing strategy in North America during the year.

What did management say?

Commenting on the result, Whispir Chief Executive Officer Jeromy Wells said:

During FY21 the Whispir platform continued to scale with ARR increasing 28.5% and largely driven by increased usage amongst existing customers who are extracting more value from the platform, as well as new customer sign-ups across each region.

Additionally, regarding the company’s future opportunities, Mr Wells said:

We see significant opportunity for growth in the underserved SME and SMB segments identified in North America. We have successfully delivered new customer growth in the recent half as a result of adding more capability to execute against our strategic plan and our refined persona-led strategy.

What’s next for Whispir?

Looking ahead, Whispir intends to focus on increasing customer numbers, platform usage, and revenue across its operating regions. While the pandemic has produced a headwind in customer wins in Asia, it has also accelerated the digitisation of many businesses.

Additionally, the company provided guidance for FY22 for four important metrics:

  • Year-end annual recurring revenue between $65.4 million and $70 million, representing growth of 22% to 31%
  • Revenue between $57.2 million and $60.2 million, representing growth of 20% to 26%
  • Operating EBITDA loss between $15.5 million and $13 million
  • Research and development spend between $17.5 million and $18 million, representing 70% to 80% growth

Whispir share price snapshot

Unfortunately for shareholders, the Whispir share price has underperformed the S&P/ASX 200 Index (ASX: XJO) by a significant margin over the past year.

The benchmark index returned 21.8% as it recovered from the crash in March 2020. Meanwhile, shares in the communication platform have tumbled 50.6% during the past year.

Whispir currently holds a market capitalisation of $275.9 million.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Whispir Ltd. The Motley Fool Australia has recommended 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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