Pushpay first-half loss widens as revenue more than triples

See also: Pushpay overtakes Xero in growth trajectory stakes

Pushpay Holdings [NZX: PAY], the mobile payments app developer, widened its first-half loss while revenue more than tripled, as the company ramped up spending on product development and sales in a bid to attract US churches to its system.

The Auckland-domiciled, Redmond, US-headquartered company posted a net loss of $6.1 million, or 12c per share, in the six months ended September 30, from $2.6 million, or 7cps, a year earlier, it said in a statement. Revenue jumped 290% to $6.3 million, while expenses rose 176% to $12.4 million.

Pushpay spent $2.5 million on product development and maintenance, a 360% increase, and $7.9 million on direct costs, sales and marketing, an increase of 296%, while more than doubling its staff to 143, largely in sales-related roles.

"Our clear growth strategy – investment in product, processes and people – combined with the large under-serviced target market of the US faith sector has driven our hyper-growth," chief executive Chris Heaslip said. "With further development of our direct sales, referrals strategy and through existing relationships with our strategic channel partners and other distribution partners, we are confident of meeting our targets."

Pushpay provides mobile commerce tools that help make payments easy between consumers and merchants and is geared to mobile charitable giving. It's targeting the US faith sector for growth, where there are more than 314,000 churches with an average 500 attendees each, along with non-profit organisations and enterprises.

In October, Pushpay said its total annualised committed monthly revenue – that is, total billings through merchants that Pushpay then collects fees from – rose to $18 million as at September 30, from $9.2 million as at March 31 and the company says it's confident it will reach its target of $28 million in the year to March 31, 2016. The number of merchants using the app increased 111 percent to 2102, beating its 2000 target.

Some 93% of Pushpay's merchant clients are located in North America, with 7% across Australasia. Average revenue per merchant declined to $US361 at the end of September, from $US367 six months earlier, reflecting lower summer giving patterns, the company said. Pushpay said processing volumes are typically lower over the summer months in the US and it expects average revenue per merchant to increase at the end of the calendar year, during merchants' seasonal peak.

The shares rose 0.4% to $7.83 and have risen 234% in the past 12 months.

(BusinessDesk)

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