In November 2022, Software-as-a-service (SaaS) communications workflow platform Whispir Limited (ASX: WSP) laid off 30% of its staff, saving millions of dollars and sending its share price soaring by 40%. However, that didn’t entail disembarking from its cost-cutting train. Whispir is continuing to consider avenues for savings, and as it does so, its CEO has resigned and the Company is casting around for new leadership.
In Q1 FY24, the Company received major federal government department sign ups for Whispir Verify services, expected to generate over $1 million of annual revenue. It also undertook new product launches and established a sales pipeline with telco partners. Plus, it made strides in the ANZ health sector alongside continued customer signings in Asia.
That said, its financials painted a mixed picture. The Company reported a free cash flow of negative $1.98 million. Its cash receipts amounted to $13.71 million, representing a 0.9% increase over the previous quarter but a 6.6% decrease compared to the prior comparable period (PCP). The decline is primarily due to diminishing COVID-19-related revenues, which significantly declined starting from Q2 FY23.
Whispir reported a 6.4% reduction in cash outflows for administration costs, amounting to $2.06 million. This reduction was in line with the Company’s expectations and was attributed to the decreased overhead expenses stemming from a reduced workforce.
In line with the restructuring efforts that took place in the second and third quarters of the previous financial year, staff costs, which encompass both regular staff salaries and capitalised labour, reduced by a significant 43.9%. Staff costs in the current quarter also included payments for annual incentives ($0.8 million) and redundancies ($0.4 million).
As the Company undertakes various cost-cutting initiatives, its CEO Jeromy Wells has hung up his boots and resigned, marking the end of his 23-year tenure with the Company. Wells will serve a contractual four-month notice period before transitioning to an Executive Director role, primarily focusing on driving strategic growth initiatives. The Company will now look for a new CEO.
Wells said, “It is now 23 years since I began to think seriously about how technology could drive more effective communication, and founded Whispir. I am immensely proud of the international company that Whispir has become, with employees in a number of countries serving some of the most recognised companies around the world. The journey is not finished yet, but it is time for new leadership to drive Whispir’s growth in this constantly expanding market.”
Entering Q2 FY24, the Company has secured commitments to raise $3.25 million through a private placement at $0.25 per share. The financing is being provided by a combination of new and existing institutional investors, along with participation from members of the Company’s Board and management.
This money is earmarked to bolster Whispir’s balance sheet and provide additional flexibility for general working capital requirements. When accounting for the proceeds from the placement, Whispir’s pro-forma cash balance at the end of September stands at $5.1 million. The Company hopes that this funding can propel it towards free cash flow positivity during the second half of FY24.
Alinda is a Business Reporter for The Sentiment
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