Pushpay (ASX:PPH) share price on watch after FY 2021 results

The Pushpay Holdings Ltd (ASX:PPH) share price will be on watch today after the release of its full year results for FY 2021…
The post Pushpay (ASX:PPH) share price on watch after FY 2021 results appeared first on The Motley Fool Australia. –

The Pushpay Holdings Ltd (ASX: PPH) share price will be one to watch on Wednesday.

This follows the release of the donation and engagement platform provider’s full year results.

How did Pushpay perform in FY 2021?

For the 12 months ended 31 March, Pushpay delivered operating revenue of US$179.1 million. This was a 40% or US$51.6 million increase on the prior corresponding period.

Positively, things were even better for its operating earnings (EBITDAF) due to the achievement of further operating leverage.

Management advised that its operating expenses only increased by 9% during the year, compared to a 40% increase in operating revenue. This led to its operating expenses as a percentage of operating revenue improving by 11 percentage points from 47% to 36%.

This was driven largely by strong operating revenue growth, further margin improvements, and disciplined cost management. The good news is that Pushpay expects significant operating leverage to accrue as operating revenue continues to increase, while growth in total operating expenses remains low.

This ultimately led to the company reporting EBITDAF of US$58.9 million for FY 2021, which was an increase of 133% or US$33.8 million from US$25.2 million in FY 2020.

It was also in line with its FY 2021 guidance for EBITDAF of between US$56 million and US$60 million. It is worth noting also that this guidance was upgraded three times during the course of the year.

Which is quite the opposite to fellow New Zealand based company A2 Milk Company Ltd (ASX: A2M), which has downgraded its guidance four times in FY 2021.

Finally, on the bottom line, Pushpay reported a net profit after tax of US$31.2 million. This was up 95% on FY 2020’s net profit.

Management commentary

Pushpay’s new CEO, Molly Matthews, was pleased with the company’s performance in FY 2021.

She said: “We are pleased to deliver a strong result for the year ended 31 March 2021. Pushpay continued its momentum throughout the 2021 financial year, delivering strong revenue growth, cash flow growth, expanding operating margins and EBITDAF growth while continuing to attract and support Customers throughout the evolving COVID-19 environment.”

“Over the year ended 31 March 2021, the Company made significant progress integrating Church Community Builder into the Pushpay solution. By successfully combining Church Community Builder’s market leading church management system with Pushpay’s unique donor management system over the past year, we are better able to execute against our vision and strategic goal of being the preferred provider of mission-critical software to the US faith sector.”

“With the significant progress in integrating the Pushpay and Church Community Builder solutions achieved over the 2021 financial year, the Company welcomed many new Customers, successfully realised strategic cross-selling opportunities within the Customer base and achieved operational efficiencies across the combined business,” she added.

FY 2022 guidance

Pushpay advised that it expects strong revenue growth in FY 2022, as it continues to execute on its strategy to gain further market share through continued innovation of its products, merger and acquisitions, and expanding into the Catholic market.

However, its earnings may not grow as quickly. Management explained that it will continue to balance expanding operating margin with opportunities to increase revenue growth. While it continues to focus on ensuring efficiency remains high, it also intends to invest strongly in future growth opportunities such as the Catholic market in the short term.

As a result, it is expecting to achieve EBITDAFI of between US$64 million and US$69 million in FY 2022. This will be an 8.7% to 17.1% increase year on year.

Though, excluding the impact of the investment into the Catholic initiative, Pushpay expects to achieve EBITDAFI of between US$66 million and US$71 million. This represents year on year growth of 12% to 20.5%.

Management concluded: “In the long-term, Pushpay is targeting to increase the appeal of our products to new customers and increase the revenue per Customer through continued innovation, and merger and acquisitions. The Catholic initiative is our first step in investing to grow our Customer base outside of our existing core Customer base, and we have set the goal of acquiring more than 25% of the Catholic church management system and donor management system market over the next five years.”

“The Catholic church is closely associated with many education providers and non-profit organisations, which presents further opportunities within the US and other international jurisdictions. Mergers and acquisitions provide opportunities to expand our Customer base and to deliver new products that can be sold into our existing Customer base more rapidly than could be achieved organically.”

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Pushpay (ASX:PPH) share price on watch after FY 2021 results appeared first on The Motley Fool Australia.

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