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Pushpay lifts FY19 net profit; FY20 guidance upbeat

Wednesday 8th May 2019

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Digital church collection payment operator Pushpay is upbeat about the coming year after lifting revenue by 40 percent and reporting a full-year net profit.

The NZX-listed, US-headquartered software-as-a-service company, reported a net profit of US$18.8 million for the year ended March 31, from a loss of US$23.3 million a year earlier. Total revenue lifted to US$98.4 million from US$70.2 million in the prior period. 

The company, which provides a donor management system, including donor tools, finance tools and a custom community app for churches, expects revenue to be between US$122.5 million and US$125.5 million in the year ending March 2020.

The latest result includes a deferred tax asset of US$20.9 million, something it had previously signaled. 

Earnings before interest, tax, depreciation, amortisation and fair value adjustments lifted from a loss of US$18.6 million to a gain of US$1.6 million. Pushpay expects ebitdaf in the current year to be between US$17.5 million and US$19.5 million.

The firm met its gross margin guidance for the year, increasing it to 60 percent from 55 percent and said that it expects gross margin of  "over 63 percent" in the year to March 2020. 

The strong result comes as the company continues to focus on medium and large customers. In October it added the largest church in the US, according to the Outreach 100 Largest Church 2018, as a new customer, with an average 51,900 weekly attendees. 

Pushpay's average revenue per customer, or church group, lifted 33 percent to US$1,315 per month due to increased subscription fees from new and existing customers, a larger proportion of medium and large new customers, as well as increased adoption of digital giving in the US faith sector and increased giving to religion in the US. 

Regarding its processing volume, the company said annualised processing volume increased to US$4.2 billion over the year from US$3.0 billion. That measure - APV - is the annualised four-week average payment transaction volume through the Pushpay payment platform, which it derives revenue from.

"We expect continued growth in annualised processing volume, driven by a larger proportion of new medium and large customers, further development of our product set resulting in higher adoption and usage, increased adoption of digital giving in the US faith sector and increased giving to religion in the US," it said.

As of March 31, Pushpay had 7,649 total customers, up 5 percent on the year. Over the year Pushpay’s proportion of medium and large customers increased from 51 percent to 56 percent. Of total customers, 98 percent were located in North America, including Canada, with the remaining 2 percent located in Australasia, which covers New Zealand and Australia.

The stock last traded at $3.73, down 2.4 percent. Greg Smith, head of research for Fat Prophets, said the decline probably reflects weaker global equity markets, due to concerns about US-China trade tensions. The S&P/NZX50 Index is down 0.6 percent. 

Smith also noted that much of the result had already been priced in as Pushpay had reaffirmed in February that it would reach a break-even situation. 


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