The Pushpay Holdings Ltd (ASX:PPH) share price slumped 13% on Wednesday last week following its interim report. Today, Pushpay announces its 2020 investor day presentation. Are there any updates that could help its share price recovery after last week’s fall?
Interim results The Pushpay share price took a turn for worse following its interim results on 4 November. The 13% slump was on the highest single day trading volume its shares had seen in more than two years.
Surprisingly, the interim results read well with growth across all financial and operational metrics. It is possible the market expected even better results considering Pushpay’s 100% share price run this year and 230% increase since March lows.
The Pushpay business is making significant strides to profitability with expanding margins and operating cash flow improvements over the period. Revenues for the six months ended 30 September 2020 increased by 53% to US$29.6 million. It expects to see continued revenue growth as the business executes its strategy, achieves increased efficiencies and gains further market share in the US faith sector.
The company’s efficiencies saw a 3 percentage point increase in gross margins from 65% to 68%. This trickled down to expanding operating leverage with total operating expenses improving by 12 percentage points from 50% to 38%. The company expects significant operating leverage to accrue as operating revenue continues to increase, while growth in total operating expenses remain low.
In recent quarters, the company has made significant strides to profitability with earnings before interest, tax, depreciation, amortisation and fair value adjustments (EBITDAF) soaring 177% to US$17.1 million and NPAT increasing 107% to US$6.9 million.
The company upgraded its EBITDAF guidance for the year to between US$54.0 million and US$58.0 million, although uncertainties and impacts surrounding COVID-19 and the broader US economy economic environment remain. In the long-term, Pushpay is targeting more than 50% of the medium and large church segments, an opportunity that represents more than US$1 billion in annual revenue.
Investor day updates The investor day presentation largely reiterated the company’s financial achievements to date including the interim results above. It also highlights the significant uncertainties in forecasts for the US economy, with significant disparities in baseline, relief bill to rescue and no end in sight scenarios.
In September 2020, the company also announced its largest product launch to date, which included 16 new products, features and enhancements to the Pushpay and Church Community Builder solutions. The launch unveiled the new product name of the Company’s all-in-one engagement solution, ChurchStaq. The investor presentation included a product demo of the complete engagement software.
The investor day presentation did not reveal any new financial market sensitive information. However, the US market experienced a significant run up overnight which is likely to positively influence the S&P/ASX 200 Index (ASX: XJO) and ASX All Ordinaries (ASX: XAO) on Tuesday.
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Lina Lim 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 has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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