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Pushpay annualised revenue growth stalls in March qtr as small churches left behind

Wednesday 11th April 2018

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Pushpay Holdings, said annualised committed monthly revenue fell 19 percent in the March quarter, marking the mobile payments app company's first quarterly decline, which it blamed on seasonality and veering away from adding small churches to its flock.


ACMR,  which measures total billings through merchants that Pushpay collects fees from, increased to US$86.4 million in the three months ended March 31 from US$58.8 million a year earlier but was down from US$106.4 million in December. The stock fell 1.6 percent to $4.20 and is up 2.4 percent so far this year. 


The Auckland-domiciled, US-headquartered company said its average revenue per customer, or ARPC, was US$989 a month in March versus US$727 a year earlier but was down 20 percent on quarter from US$1,233 per month in December. 


According to Pushpay, the quarter-on-quarter slide was due to the fact that the December quarter is typically a high period due to increased giving around Christmas and leading into the US tax year, which ends on Dec. 31. The company had previously signalled it expected ACMR to slide in March due to "seasonality". 


On a conference call with investors, chief financial officer Shane Sampson said the "the level of new customer grab is smaller and doesn't offset the seasonality in fact as much." He also noted there was an extra Sunday in December versus the prior year. 


Sarah Elder, investor relations manager, said the company has moved away from adding small churches in the year ended March 31 and didn't have an offsetting increase in the number of customers that it saw in the 2017 financial year. 


In the year to March 31, Pushpay’s proportion of ACMR derived from medium and large customers increased to 86.6 percent from 82.4 percent a year earlier, it said. 


Elder also noted the company changed its annualised revenue measures in July last year to use an use in-month component for volume fees rather than a 12-month average, which led to a recalculation and meant the ARPC now also shows a seasonal dip a year ago between December and March.


The software company is moving away from focusing on ACMR and will now focus on GAAP revenue as its preferred metric, Elder said. Pushpay said it doubled revenue in the year to March and said it is now processing over US$3 billion in payments annually.


"Pushpay delivered on its FY18 revenue guidance of US$70 million", doubling unaudited total revenue over the fiscal year to March 31", said chief executive Chris Heaslip in a statement published on the stock exchange. 


It expects revenue of between US$20.5 million and US$22 million for the quarter ended June 30, an increase of 52 percent on the same period last year, Elder said. 


Customers rose 8 percent to 7,276 in the March quarter from the year earlier. According to Pushpay, 13 of the top 20 and 54 of the top 100 largest churches in the US use its service. 


Pushpay provides a donor management system, including donor tools, finance tools and a custom community app, to the faith sector, non-profit organisations and education providers.  As at March 31, 97 percent of Pushpay’s customers were located in North America, which covers the US and Canada, with the remaining 3 percent located in New Zealand and Australia.


The company reiterated plans to pursue a US market listing by December. It offered no further detail other than to say any market listing would be subject to satisfactory market timing, approval by a US exchange, and satisfying a number of other customary listing prerequisites.


Looking ahead, it said it is confident in its strategy to gain further market share in the medium-term and it expects to ACMR and APRC to "steadily grow" over the 2018 calendar year and it "remains in a position to reach its target of breakeven on a monthly cash flow basis prior to the end of calendar 2018." 



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