Whispir provides a cloud-based communications platform, known as Enterprise, that enables organisations to send two-way, multi-channel programmable communications. Ord Minnett has initiated coverage of Whispir, which listed on 19 June, with a Buy recommendation and a $2.00 target price.
The market for cloud-based programmable messaging is broad in potential and growing quickly. Whispir’s product is differentiated and has been validated by its ability to attract more than 500 customers, with 116% customer revenue retention and 93% recurring revenue in FY18. Its customers have created thousands of unique ‘communications use cases’ and process an estimated 1.5bn interactions per annum between 55m people.
Whispir’s typical communications use cases fall into the following broad categories:
- Business co-ordination – designed to communicate relevant information, across multiple channels with high delivery completion rates and low latency. Examples include crisis communications, human resources and onboarding, IT outage notifications.
- Customer engagement – designed to create more personal, contextual and targeted two-way multi-channel interactions with customers. Examples include marketing campaigns, promotions, customer support, and billing and payment notifications.
- Innovation – adding workflow communications capabilities to existing applications, or creating plug-ins for third-party platforms. For example, Whispir’s ServiceNow plug-in expands the default email messaging capability by adding SMS, voice and conference calling.
For FY20, revenue is forecast at $37.8m, implying a two-year compound annual growth rate of 17%, underpinned by a demonstrated ‘land and expand’ strategy together with accelerated investment in sales and marketing. This improved top-line momentum, combined with only modest overhead cost growth of 6% year-on-year, is expected to deliver operating earnings break-even on a run rate basis by period end.
Whispir is leveraged to a number of positive global themes, including: 1) Enterprise cloud software spending; 2) digital disruption enablement; and 3) secular growth in programmable messaging. The company’s open architecture, easy-to-use and flexible workflow, two-way messaging and multi-channel capability suggest it is well positioned to participate and ride the cloud communications wave.