Why the Pushpay (ASX:PPH) share price has rocketed up 17%

The Pushpay (ASX: PPH) share price has rocketed higher by 17% after the company announced its FY20 report.

What is Pushpay?

Pushpay is a New Zealand based donation systems and software business for religious, not-for-profits and education providers in the US, Canada, Australia and New Zealand. Pushpay is used by over 7000 churches worldwide. The average gift is $192. Pushpay makes money by charging a subscription fee for its app but also from clipping the ticket on processing donations.

What did Pushpay report?

The Kiwi company said that it grew operating revenue by 33% to US$127.5 million. This was largely driven by the 39% increase of total processing volume to US$5 billion.

Not only did revenue grow quickly but the gross margin also improved from 60% to 65% over the 2020 financial year.

This increase of revenue and the gross margin, combined with the limited 5% growth of expenses, led EBITDAF to rise by 1,506% to US$25.1 million (click here to learn what EBTIDA means – the F stands for foreign currency).

On a guidance basis, which excludes the acquired Church Community Builder, it grew EBITDAF by 1,677% to US$27.8 million. This was more than the top end of the upgraded guidance of US$27 million.

Net profit fell by 15% to US$16 million, but last year included previously unrecognised tax losses and deferred research and development expenditure of US$20.9 million, which contributed to the net profit of US$18.8 millionl

Outlook

Due to the ongoing pandemic and the uptake of Pushpay’s digital services, FY21 EBITDAF is expected to be between US$48 million to US$52 million. This would be around double FY20’s EBITDAF. Pushpay is still targeting over US$1 billion of annual revenue. It could continue to be a strong performer.

Disclosure: Jaz does not own shares of Pushpay at the time of writing. 

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