The Whispir Ltd (ASX: WSP) share price is starting the week off with a bang. Whispir shares are up 7.63% at the time of writing to $2.54 apiece on the back of an FY20 trading update.
Whispir is a software-as-a-service company that provides a communications workflow platform to help businesses automate their interactions with employees, customers, suppliers, job applicants, and other stakeholders.
Whispir operates globally and supports some of the world's most renowned brands including Disney, Coca Cola and Qantas Airways Limited (ASX: QAN).
The company is on the smaller end of the ASX with a market capitalisation of $264 million and is relatively new to the market after listing in June 2019.
Why the Whispir share price is spiking
This morning, Whispir provided an FY20 trading update. The company now expects its FY20 result for earnings before interest, tax, depreciation and amortisation (EBITDA) to be between negative $7.9 million and negative $7.4 million. This is well ahead of the prospectus forecast of negative $9.4 million.
Whispir attributed this material lift to a combination of stronger than forecast revenue and operating expenditure being lower than expected.
The company has set its sights on releasing its FY20 results on or around 26 August 2020.
The Whispir share price has been a standout performer in recent months, bouncing 274% from an all-time low of 68 cents in March.
Along with overall market sentiment, this has likely been due to the increased reliance on communication amid the COVID-19 crisis.
Back in April, Whispir reported an uptick in demand as customers used its platform to communicate in an effective and timely manner. Notably, the third quarter of FY20 ending 31 March saw the company report a record 49 net new customers, as well as increased platform use by existing customers.
The company had a total of 558 customers at the end of the quarter, including Victoria's Department of Health and Human Services who is using the Whispir platform to interact with Victorians as part of its coronavirus containment plan.
Importantly, the company remained well-positioned for stability and growth at the end of the quarter with a cash and cash equivalents balance of $16.7 million at 31 March 2020.
Despite being further up the risk curve, I believe Whispir is a small-cap ASX tech share to watch due to COVID-19 tailwinds and the company's capital-light business model, large addressable market opportunity and high recurring revenue growth.
