Spenda Ltd (ASX:SPX) marked a strong September quarter with cash receipts from customers hitting a record $1.92 million, 157% higher than the prior comparable period and a 6% increase quarter-on-quarter.
The innovative software company with embedded electronic payment solutions for supply chains and trading networks notched up payment volumes (PV) of $74 million, up 20% from $62 million in Q1 of FY24 and this excluded $34 million that Limepay processed in the quarter.
A key achievement in the quarter was completion of the Limepay acquisition with shareholders approving this on September 17, 2024, and all conditions precedent satisfied on September 20, 2024.
This acquisition provides Spenda with a B2B payments ready technology platform, ready to deploy within its platform ecosystem.
Growth to accelerate
With the launch of SwiftStatement set for November and the growing impact of the Limepay acquisition, Spenda expects to accelerate growth in the future.
As a guide to this, Limepay’s PV for the quarter was $40 million, generating revenue of $664,000.
Limepay also entered an MSA with Lessn during the quarter, to process all Lessn’s PV, with onboarding expected imminently. This is currently approximately $50 million per annum.
Spenda’s GM of Corporate Development Francis deSouza said: “In the past quarter, our focus has been on the effective execution of our record pipeline of work across all partnerships.
“Despite ongoing resource constraints, I am pleased to report that all programs remain on track.”
Limepay advantages
The acquisition of Limepay provides Spenda with significant strategic advantages that are unlocked by maximising the impact of consolidating a complementary product roadmap, a cohesive culturally aligned development team and additional product capabilities.
This will enhance the speed that Spenda can roll out to existing contracted channels, including Carpet Court and Capricorn, while also scaling payment flow across the combined entity.
Channel Marketing efforts
Throughout the September quarter, the company focused on Channel Marketing efforts to bolster member engagement initiatives for Carpet Court and Capricorn, and to deliver brand alignment following the Limepay acquisition.
A highlight included the marketing team organising and planning Spenda’s participation in Carpet Court’s 50th Anniversary State Conference in August with the focus on the Standard Operating Environment solution that Spenda is developing for Carpet Court, which was presented to their entire store network.
The company also worked closely with Capricorn in the following ways:
- To support the rollout of the SwiftStatement program, the company assisted Capricorn in developing marketing communications and collateral to assist rollout across the member network.
- The company also participated in Capricorn’s Gala and Roadshow event series in Sydney in September, showcasing SwiftStatement to NSW members through a presentation at the gala event.
- The remainder of the Capricorn events are scheduled to take place across the country in October and November, all aimed at driving member engagement in the SwiftStatement program.
Other products
Other progress for Spenda during Q1 FY25 was continuing strong growth in AirPlus facilities with new and existing clients, with revenue growing to more than $1.3 million per annum. This is expected to generate more income than the traditional lending facilities in the financial year.
It also achieved continued scaling of its finance and payments products, including SpendaAR, SpendaAP, Payment Widget with corresponding SaaS Software Licensing fees.
Capricorn and SwiftStatement
Since the end of Q1 Spenda has built on a 10-year Master Services Agreement by executing a Preferred Supplier Agreement (PSA) with Capricorn that enables Spenda to offer its products and services to the Capricorn membership.
As part of the PSA, Spenda’s PSBL product under the SwiftStatement brand will be launched on November 4, 2024, to Capricorn’s Member Network.
SwiftStatement enables automatic invoice integration for Capricorn members on their consolidated trade account statement and allows Spenda to provide members an integrated payment capability which will reduce reconciliation time and manual data entry errors, saving costs for Capricorn members.
Spenda will scale its ARR as it rolls out the SwiftStatement product to Capricorn ~30,000 members. Given the strong market fit for the Capricorn membership, the company is cornerstoning its strategy with Capricorn and the automotive industry using SwiftStatement.
Off the back of the SwiftStatement rollout, the company expects to launch other software and payments initiatives that will scale ARR.
Potential to increase PV
“We are planning for the commercial launch of our new payments infrastructure with Capricorn which has the potential to significantly increase the payment volumes on our platform and we expect to launch the SOE for the Carpet Court network which will enable the scaling of payment volume through their network," deSouza said.
The commercial launch of SwiftStatement with Capricorn is expected to generate a $1.4 million licence fee and up to $18 million in ARR by September 2025, assuming an adoption rate of 50% amongst the +30,000-strong membership base.
At the end of the quarter, Spenda had cash and cash equivalent of $6.5 million, excluding the $1.6 million R&D rebate received after September 30.
Activities this quarter
Operational activities this quarter will include:”
- Commercial launch of Capricorn DSD project - The third milestone payment relates to the onboarding of the first cohort of suppliers, which will trigger the $100,000 per month SaaS Software Licensing fee.
- Commercial Launch of SwiftStatement to Capricorn members in November - expecting to deliver +$1 million in revenue and build a base for durable revenue into the future.
- Continued delivery of the SOE solution for the Carpet Court store network - First stores will receive software in early November 2024, with the broader rollout in the new year. SOE will enable Carpet Court stores to manage their quote-to-install payment flow and the scale-up of consumer payment services, including digital payment options and POS terminals in-store.
- Continued rollout of Spenda AP bundled with Airplus facilities.