Pushpay targets 10% of US annual giving as it moves forward US listing date

Pushpay founder Chris Heaslip says it is focussed on signing up bigger customers

Pushpay Holdings exceeded its target of US$100 million in annualised committed monthly revenue and will move forward its US listing date as it continues to target bigger churches.

ACMR, the company's preferred metric which measures total billings through merchants that Pushpay collects fees from, was US$106.4 million in the three months ended Dec. 31, 2017, from US$57.9 million in the December 2016 quarter. Average revenue per customer rose to US$1,233 per month in the quarter, from US$785 per month a year earlier.

The company, which announced it had hit the US$100 million ACMR target on the first trading day of the year, said its medium-term goal is US$10 billion in annualised monthly payment transaction volume, or 10 percent of annual giving. It wants to engage over 50 percent of the medium and large church segments, which it says would mean US$1 billion in annual GAAP revenue.

Pushpay's app has gained traction in the US faith sector, where its services are used by 2 percent of the estimated 340,000 churches, including 12 of the 20 biggest churches in the US and 50 of the top 100 churches, according to its market update today. Some 57 percent of its ACMR came from large customers in the latest quarter, from 51 percent a year earlier.

The company expects ACMR to dip in the current quarter due to seasonal effects, before steadily growing over the rest of the calendar year.

On an investor call on Tuesday, Chris Heaslip, chief executive and co-founder, said the US$10 billion transaction volume and US$1 billion GAAP revenue targets were aspirational, "but we would like to think we can continue the pace of growth over the next few years to get to the targets as quickly as possible".

"We have focused on signing up fewer but larger customers," Heaslip said. "The efficiency is greater, the value they get is greater, the growth potential is greater as well, so we feel like it's the right move for the business. The customer numbers will continue to stay down for a bit and over the coming few quarters here we expect that to grow."

Pushpay also said it will pursue a US listing by the end of this calendar year, slightly earlier than the previous guidance of listing within 15 months which would have meant listing by Feb. 16, 2019. It says it is committed to remaining listed on the NZX and ASX.

Chief business development officer James Maiocco said Pushpay had been in talks with Apple since the middle of last year, when Apple changed guidelines for its App Store to prohibit apps being generated from a template. In December, Apple clarified and lifted that prohibition following US Congressional pressure to mitigate the impact on small businesses and publishers, and Pushpay has now begun using its consolidated app, he said.

"We have been working closely with Apple to agree upon plans to transition our customers to a consolidated app," Maiocco said. "We've been doing this and we debuted this at the end of last quarter, so ultimately these changes should have no impact upon our core strategy. It will enable us to deliver innovations to market more quickly and improve customer onboarding."

The shares, which joined the NZX50 index when Xero left late last year, rose 0.5 percent to $4.37, and have risen 133 percent in the past 12 months.

(BusinessDesk)

Related video: NBR View's Susan Wood sits down for an in-depth Newsmakers interview with Pushpay chief executive and chief executive Chris Heaslip (May, 2017).


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9 Comments & Questions

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Yet again, management set lofty goals and exceed them. Great to see they are now targeting 10% of the total addressable market. The Apple of the non-profit donation space rising up before our eyes?

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Ha, set a lofty target, change the way its measured, achieve it, now signal they will fall below set target next quarter due to the changes made. Good luck buddy

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Ever heard of seasonality? Always been known with the sector they work in. ACMR rejig was to align with general SaaS accounting standards. If you spent a few minutes averaging it all out you'd see the growth rate is still phenomenal.

Should take a look at latest forecasts for FY18 revenue. Profitability just around the corner. Still no real competition. Eventual expansion into other sectors. Future looks bright, almost as bright that invested from the beginning ;)

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As Ihug's Tim Wood pointed out on Twitter last year @bdxkiwi : this is kindof an ethically grubby company. They target "prosperity churches" aka Destiny etc. This seems to have skipped scrutiny for this company ( well done @bdxkiwi for flagging this). Given that the principals came out of HRV ( I think both but maybe only one) that kindof makes sense.

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There's a lot of pathetic whining and outright falsities in that post above. Firstly, Pushpay doesn't target "prosperity churches". They serve large and medium sized churches of all denominations . Secondly, Destiny don't use Pushpay.

Pushpay is, like IHUG was, and like TradeMe is now, a platform. With Pushpay, people make payments to churches and charities (with US churches assuming a major role in charitable activity due to the USA's lack of a public health system and weaker social welfare system). Have a look at Dream Center in LA by way of example, who are at the forefront of helping people with addiction, in poverty, and rescuing poor young women from sex trafficking. Now, isn't that a cause that deserves support? And shouldn't a cause like that be able to rely on the latest technology to promote its cause?

Seriously, there is some terrible tall poppy syndrome afflicting some people out there.

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Can someone help with the business model - assume they charge a transaction fee. From the above "US$10 billion transaction volume and US$1 billion Revenue target" - are they taking a 10% cut? If so I can tell you that that is unsustainable the fee is too high.

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The risk is that this disruptive business model can be replicated to create massive margin pressure. They just need to hang on long enough to sell the business before the market gets more competitive.

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Also need to factor in subscription fees, but yes, the bulk of their revenue is from volume. Until other competitors come along with a viable alternative, PPH will continue their wholesale land grab pretty much unfettered. I believe there is enough fat in the margins (gross=~60%) to easily abide some competition. As of yet, no one on the horizon...

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Its pretty amazing that it added about $30m in ACMR in the last qtr with barely any customer stock growth. ARPC has also almost doubled in a quarter.
Pushpay seems to have some amazing SaaS industry leading revenue expansion methods!

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