Whispir tipped to defy rout plaguing tech stocks as revenue soars 27 per cent

Whispir is positioning itself to emerge strongly from the share price rout that has plagued the tech sector, signing on a smorgasbord of customers.

Whispir chief executive Jeromy Wells says the company has ‘acquired new customers with high-growth potential in North America, ANZ and Asia’. Picture: David Geraghty

Cloud communications provider Whispir looks set to defy the rout plaguing tech stocks, delivering 27 per cent revenue growth year-on-year as it springboards into Asia on the back of a deal with telco giant Singtel.

Annualised recurring revenue for the company — initially backed by Telstra Ventures — soared 26.6 per cent to $60m, according to its earnings report for the three months to December 31, while it more than doubled its customers during the quarter compared with the same period in 2020.

But its shares closed 1.9 per cent lower on Thursday against a flat broader sharemarket. Chief executive Jeromy Wells, however, prefers to look at the company’s share performance over the past month, which came as the tech sector suffered a brutal unravelling on expectations the sheer volume of free money being pumped into the global financial system is about to be shut off.

“If you go back to one month, you know, we’re up 33.69 per cent versus the tech sector being down 11 per cent,” Mr Wells said.

“Our recent performance is strong and improving and the analysts’ view is that there’s a long way to go up to where the share price should be.”

Indeed, analysts are optimistic about Whispir, which has carved out a niche during the pandemic by creating a series of communication templates and other services for its clients – which include Telstra, the Victoria and NSW governments, the NRL and energy major Jemena.

But its new marquee customer is Singtel, allowing it to expand deeper into Asia.

“For all the talk of interest rates rises and the doom and gloom about technology stocks right now, software-as-a-service company Whispir is showing very strong operational momentum, growing 27 per cent year-on-year and adding a record number of customers, yet trading at a fraction of the valuation of bigger ASX- and US-listed peers,” said Gaston Amoros of Forager Funds Management.

“The Singtel deal they announced in December is really transformational for their Asia Pacific division and significantly de-risks the growth outlook for FY23.”

Mr Wells was mindful of delving too much into the specifics of the Singtel deal that was struck late last month, but analysts see the deal as delivering a similar uplift to the company’s partnership with Telstra.

“We understand this contract will operate similar to Whispir’s Telstra contract in ANZ (Australia and New Zealand) – i.e. Singtel will resell Whispir to their enterprise customer base, take a commission, manage billing and provide network carriage requirements,” Shaw and Partners analysts Jules Cooper and Josh Goodwill wrote in a note to investors.

“For context, Telstra today generates the bulk of Whispir’s channel partner revenue in ANZ, which totalled $33m in FY21.”

Mr Cooper and Mr Goodwill have a price target of $4.85, which implies a trading multiple of 7.4 times revenue. This compares with Whispir’s US peers trading on multiples ranging between six to eleven times.