9 Nov 2022

Mobile donations company Pushpay Holdings sees profits dive

2:01 pm on 9 November 2022
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Pushpay revenue rose 10 percent to $US103 million. Photo: 123RF

Takeover target Pushpay Holdings has announced its profits have more than halved with slower than expected customer growth despite a lift in revenue.

The mobile donations company's net profit for the half year ended September was down 54 percent on a year ago to $US8.79 million ($NZ14.75m).

Pushpay revenue rose 10 percent to $US103m. The numbers were in line with recent guidance.

Key numbers for the six months ended September compared to a year ago:

  • Net profit $8.79m vs $19.1m
  • Revenue $103.1m vs $93.5m
  • no dividend

Pushpay chief executive Molly Matthews said the company was facing headwinds due to rising economic pressures on churches.

"These are the same that businesses are facing - they are facing increased labour costs and inflation in all of the core items they need to run their organisation," she said.

"Many of the churches are having to make difficult decisions around software or reducing expenses across the board. So we're definitely seeing that more heavily in the middle market today," she told investors.

The company continued to prioritise investment and was focused on execution in strategic growth areas in the United States such as opportunities in the Catholic Church sector.

"Although market conditions and macroeconomic factors present ongoing challenges, we have made progress in executing towards our strategic goals in the first half of FY23," she said.

"Our first-half progress includes the completion of the majority of Pushpay's go-to-market strategy reset, including recruitment of a new and experienced team. The positive effect of this on future new customer numbers is expected to become more apparent later.

"Net new customer growth has been slower as the go-to market reset has been completed, which has adversely affected revenue and processing volume growth. This combined with an uncertain economic backdrop due to rising interest rates, inflation and labour costs has led to churches re-evaluating their purchasing decisions, resulting in lower new customer adds than expected."

The company noted new customer growth was up 4 percent from last September including the US Army Chaplain Corps and the Archdiocese of Seattle.

"These customers represent wide-reaching communities and the ability for Pushpay to support millions of people, and organisations, across the globe with our digital software solutions," she said.

The company is the subject of a $1.54 billion takeover offer from two big shareholders, BGH and Sixth Street, who own a combined 20 percent and are offering $1.34 a share, which Pushpay's board is backing as offering compelling value.

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