Whispir share price roars higher on record revenue

Here's how FY22 panned out for Whispir.

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Key points

  • The Whispir share price is up 3.8% to $1.24 following the release of its full-year results 
  • Revenue reached a new record of $70.6 million in FY22, while losses widened 
  • Whispir is expecting to turn EBITDA positive in the second half of FY23 

The Whispir Ltd (ASX: WSP) share price is trudging its way upwards on Wednesday amid the release of full-year results for FY22.

At the time of writing, shares in the communications platform provider are 3.8% in the green at $1.24. However, the share price did reach a high of $1.27 earlier in the session.

Whispir share price rallies despite costly growth

  • Revenue up 48% on the prior corresponding period to a record $70.6 million
  • Annual recurring revenue (ARR) up 22% to $65.4 million
  • Gross margins slipped from 59.8% to 58.5%
  • EBITDA loss deepened to $10.6 million from $3.8 million
  • Net loss expanded to $19.5 million from $9.5 million
  • Cash balance at the end of June 2022 of $26.08 million

While the bottom line worsened in FY22, the company took its revenue to the next level. The full-year reports indicate that this substantial growth was mostly underpinned by the Australia and New Zealand operations (ANZ).

Specifically, the ANZ business conjured up a 56% improvement in revenue. Whispir highlighted its partnership with major healthcare providers throughout COVID-19 as a part driver of this improvement.

Additionally, despite making a concerted effort to reduce expenses in the third and fourth quarters, operating expenses outpaced revenue growth year on year. These increases were said to have been driven by greater marketing, research and development, and admin expenses.

However, looking at the positive Whispir share price, it appears investors are focusing on the solid revenue growth today.

What else happened in FY22?

Turning to key events during the financial year, Whispir landed several notable deals. For example, the company signed a 36-month contract with The Department of Education South Australia, enabling 900 schools to make use of the platform for a variety of purposes, including internal communications.

Furthermore, an 8-year long contract was secured with a 'significant' Australian government department in FY22.

Pleasingly, while still a small portion of the business, Whispir grew its revenues in Asia and North America. Asia witnessed a marginal 1% increase, whereas North America delivered a 38% jump.

What did management say?

Commenting on the result, Whispir CEO Jeromy Wells said:

Whispir has again delivered a strong financial performance, with record revenues secured while reducing operating expenses in Q4. Our strengthened leadership team has contributed to Whispir's continued success as we set our sights firmly on becoming EBITDA positive in the second half of FY23.

Further bolstering confidence in the Whispir product, Wells stated:

Governments, enterprises and other organisations are now clearly committed to a future where digitisation plays an essential role in ensuring communications are targeted, efficient and effective. The benefits of incorporating artificial intelligence, algorithms and data to inform how and when to communicate are becoming clear, and this realisation continues to drive our business in all markets. Put simply, it is becoming costly for organisations not to invest in intelligent communication services.

What's next?

Rather than a distinct range of financial expectations for FY23, management opted to go for a more general outlook commentary today. This might make the Whispir share price difficult to forecast in the near term.

Generally, the company is aiming to continue delivering strong revenue growth across all regions. In addition, management is aiming for gross margin improvements.

Finally, Whispir is eyeing positive EBITDA in the second half. Management believes this is achievable without further capital requirements.

Whispir share price snapshot

It has been a slobber-knocker of a last 12 months for the Whispir share price. Over this time, investors have watched as their shares have eroded 41% in value.

Likely the company's valuation has been punished during this time as the market abandoned its desire for unprofitable businesses. This is demonstrated by the 27% fall in the S&P/ASX All Technology Index (ASX: XJO) over the last year.

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. has positions in 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 Scott Phillips.

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