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Pushpay expects to reach $100m annual revenue target early; shares jump to record high

It increased its ACMR 108% to $29.1 million in the six months ended March 31.

Tina Morrison
Wed, 13 Apr 2016

Pushpay Holdings [NZX: PAY], the mobile payments app developer, expects to reach its target of $100 million of annualised committed monthly revenue six months early as it expands its product offering and narrows its focus to larger customers. The shares rose to a record.

It increased its ACMR 108% to $29.1 million in the six months ended March 31 compared with the previous six-month period through September 30, 2015, and ahead of its target for the period of $28 million, the Auckland-domiciled, Redmond, US-headquartered company said in a statement. That prompted it to bring forward its target for reaching $100 million ACMR, the measure of total billings through merchants that Pushpay collects fees from, to the end of February 2018, ahead of its previous forecast for August 2018.

Pushpay provides mobile commerce tools that help make payments easier between consumers and merchants and is geared to mobile charitable giving. It has gained traction in the US faith sector, where its services are used by more than 1% of the estimated 314,000 churches with an average 500 attendees each. It has turned its focus to larger merchants, who have the resources to implement its service more widely, and now has four of the largest 10 churches in the US using its service.

"Pushpay continues to gain market share in the US faith sector," said chief executive Chris Heaslip. "We continue to refine our growth strategy, focusing on attracting larger merchants which have the resources to maximise implementation, which in turn increases engagement and leads to higher retention."

Its shares touched a record high $2.83 and were recently trading at $2.80. They have gained 54% in the past three months, ranking them the second-best performer on the S&P/NZX All Capital Index. Pushpay undertook a four-for-one share split in February to increase the stock's liquidity.

Some 95% of the company's merchants are based in the US and Canada, with the remaining 5% in New Zealand and Australia. Most of the company's revenue and costs are in US dollars and it will change its financial reporting to US dollars after April 1 this year, to reduce the impact of exchange rate movements on its financial results and key metrics.

The company is foregoing short-term profits to invest in its future growth in the US and said it's in talks with a number of US-based venture capital firms who it believes have the potential to add significant value, with additional funding likely to be raised within the next six months. It didn't specify the likely amount. It had cash and available funding lines of $16.2 million as at March 31.

"Pushpay believes  it is preferable to focus on and invest in growth as the best means to achieve overall value in its business," the company said. "We are also conscious of the importance of demonstrating a path to profitability. While we continue to invest to scale the business, our current business plan implies the business reaching breakeven on a monthly cashflow basis in the 2017 calendar year."

Over the past quarter, it began offering an event registration service to its church clients, which it said strengthens the value of its offer and complements its existing payment services.

It's also looking to expand its service to bill payments and is piloting its mobile offering through two large enterprises that it didn't name to a selection of customers who have missed one or more payments in the past six months. The pilot found more than 95% of customers using Pushpay paid on or before the due date, compared with 76% who didn't use the service, it said.

Pushpay estimates it has a market opportunity of 5.6 million enterprises in the US and 1.4 million non-profit organisations.


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Tina Morrison
Wed, 13 Apr 2016
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Pushpay expects to reach $100m annual revenue target early; shares jump to record high