Fintech Pushpay Holdings [ASX:PPH] saw 1H23 revenue rise by 10% to $103 million — but net profit slid 54% to $8.8 million.
PPH shares were flat on the results.
The Pushpay stock has been down 35% in the past 12 months.
Source: tradingview.com
Pushpay’s 1H23
Pushpay, a donor management system that caters mostly to churches in the US, released its half-yearly results for the six months ending 30 September 2022.
Pushpay reported 10% revenue growth and a 2% increase in total processing volume, which rose to US$3.6 billion.
However, PPH admitted net new customer growth was slower than it had hoped. The company’s total customer base increased by 4% to 14,602.
Pushpay expects customer growth to improve in 2H23, noting the first half of the financial year is typically slower ‘due to the US summer holiday period.’
The fintech reported underlying EBITDAF came down 10% from US$29.6 million to US$26.8 million, with a gross profit margin unchanging at 69%.
Pushpay generated US$16.9 million in operating cash flow across the first half of FY23 and reduced bank debt from US$54.0 million to US$40.0 million.
PPH said it has lowered operating revenue growth expectations to be between 4–8% for FY23 (previous guidance was for growth of 10–15%).
Graham Shaw, Pushpay’s Chairman, acknowledged that the timeline for the firm’s strategic growth ambitions has been pushed back:
‘Our recent trading and FY23 guidance update highlighted some of the challenges that the Company is facing in a post-COVID world. The Board remains confident in Pushpay’s longterm strategy, however, notes the execution risks of delivering our strategy over time. Our medium-term goals of more than US$10 billion in Total Processing Volume and greater than 20,000 Customers have not changed, however, the time to achieve these has been impacted by current operating trends. We now expect it to take a further 12 to 18 months, on the basis that the current trends improve. We will continue to monitor and adapt to both challenges and opportunities in our operating environment as we remain focused on executing our strategic plans.’
A word from PPH’s Chair and CEO
’During the first six months of the 2023 financial year, we continued to strengthen our strategy and execute on our initiatives to drive further growth into the future,’ said PPH’s CEO Molly Mathews, alongside Chair, Graham Shaw.
‘As signalled in May 2022, FY23 represents an investment year for Pushpay as we set the foundation for future growth. We expect early results from our strategic initiatives to be seen from FY24 and into the future years.
‘Broader macroeconomic trends are affecting organisations across a range of industries. Tight labour markets and wage inflation are creating challenges for both our customers and our own business; and slowing US economic growth is also putting pressure on new donor numbers within churches. Competition has also increased, although we have seen consolidation in the market commence.
‘Our medium-term goals of more than US$10 billion in Total Processing Volume and greater than 20,000 Customers have not changed, however, the time to achieve these has been impacted by current operating trends. We now expect it to take a further 12 to 18 months, on the basis that current trends improve.’
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Regards,
Kiryll Prakapenka
For Money Morning
