PPH - PushPay (Church/donor software.)

[RupertBear]

Not sure these reports are always worth the paper they're written on (probably more a reflection on the massively bullish initiation report FB put out), but exec summary of Craigs report released today copied below.

Pretty modest price target of ~$1.91 with a lack of obvious catalysts, suggests to me holders are taking a punt on further uncertain growth while wearing the costs of seeking it out. Ignoring Ogg for a second, but only a second, what's your upside view?

My current view is that this business is now largely reaching (has reached?) maturity and the growth opportunities from here on out aren't going to move the SP by the %'s we've seen historically. Will probably look to take some $ off the table and reallocate elsewhere - Bitcoin anyone?

Market share trends remain positive

Our survey of the Top 100 US Churches finds that PPH 1) remains thedominant player with 56% share, a slight increase since our initial survey inSep 2018, and 2) has been successful at retaining its existing large Churchcustomers, with a SaaS best in class retention rate of 95%/yr, highlighting thestickiness of the product. We note that tithe.ly, PPH’s highest profile andfastest growing competitor 1) has not increased its market share amongstlarge Churches (suggesting its growth is skewed to smaller Churches, thatPushpay has not targeted) and 2) has lifted its prices c10% since our firstsurvey, at the same time as Pushpay has reduced its prices c9%, so thatPushpay is now slightly cheaper than tithe.ly, suggesting price pressure willease in coming periods. While Pushpay's organic customer growth of c10%since Sep 2018 has been slow relative to its smaller competitors, it is in linewith the 12% growth delivered by Blackbaud (BLKB.NAS), which also targetsa primarily enterprise-level customer base.

Catholic market an attractive opportunity

In January Pushpay flagged that it was pursuing an opportunity to capturethe Catholic market, with a trial at a large diocese currently underway. Weestimate, supported by channel checks, that collection-plate donations to theCatholic Church total around US$5.1bn/yr, which is notably smaller than theProtestant TAM but represents a meaningful TAM relative to PPH’s currentprocessing run rate of cUS$7bn. Moreover, we see Pushpay as well positionedto take share, with a weak competitor set, low levels of digital penetrationcurrently, and a relatively concentrated set of key decision makers.

Looking for strong FY21 result; cautious on FY22

Data suggests that giving to US Churches has recovered in 2H21, following asofter 1H21. While this may be partly offset by a decline in digital share ofwallet from the "low 60s" over 1H21 (peak of c75% during full closure in April2020), most Churches were still partially closed in 2H21, which should supportPPH to deliver at the top end of its US$56-60m EBITDAF guidance range(CIPe: US$59m).Looking into FY22, however, we are cautious that digitalshare of wallet may re-trace further as Churches in the US fully re-open.Combined with additional opex of cUS$8m in FY22 to capture the Catholicopportunity, we expect EBITDAF to flatline at US$58m (vs consensusUS$69m), before resuming growth from FY23. With PPH trading in line withour revised TP of $1.91 (-12% mainly due to higher RFR), and on 41x FY22e PE,and a lack of obvious catalysts over the next 12 months, we retain Neutral.

Those were my thoughts as well Sir Ten. I sold down a few recently @ $1.90. My average buy is now $0.33 so I have a bit of wriggle room to wait and see how they go.

[winner69]

Good result

http://nzx-prod-s7fsd7f98s.s3-websit...046/345811.pdf

[sb9]

Good result

http://nzx-prod-s7fsd7f98s.s3-websit...046/345811.pdf

Great result, EBITDAF is almost at top end of guidance at $59mln, nuff said.

[winner69]

Great result, EBITDAF is almost at top end of guidance at $59mln, nuff said.

....and +133% on last year ...nuff said

[sb9]

Not sure these reports are always worth the paper they're written on (probably more a reflection on the massively bullish initiation report FB put out), but exec summary of Craigs report released today copied below.

Looking for strong FY21 result; cautious on FY22

Data suggests that giving to US Churches has recovered in 2H21, following asofter 1H21. While this may be partly offset by a decline in digital share ofwallet from the "low 60s" over 1H21 (peak of c75% during full closure in April2020), most Churches were still partially closed in 2H21, which should supportPPH to deliver at the top end of its US$56-60m EBITDAF guidance range(CIPe: US$59m).Looking into FY22, however, we are cautious that digitalshare of wallet may re-trace further as Churches in the US fully re-open.Combined with additional opex of cUS$8m in FY22 to capture the Catholicopportunity, we expect EBITDAF to flatline at US$58m (vs consensusUS$69m), before resuming growth from FY23. With PPH trading in line withour revised TP of $1.91 (-12% mainly due to higher RFR), and on 41x FY22e PE,and a lack of obvious catalysts over the next 12 months, we retain Neutral.

Looks like Craigs have got that horribly wrong going by what company guided today..

"Pushpay is expecting to achieve EBITDAFI for the year ending 31 March 2022 of between US$64.0 million and US$69.0 million, although uncertainties and impacts surrounding COVID-19 and the broader US economic environment remain."

[flyinglizard]

a 100% growth, keep all financial data in the right trend

[sb9]

Key metrics to be aware of going into FY22 period..

Gross margin improvement

Pushpay’s diligent approach to optimising gross margin continues to drive pleasing results. Pushpay increased gross margin by three percentage points for the year ended 31 March 2021 from 65% to 68%.

Expanding operating leverage

While Pushpay increased operating revenue over the year ended 31 March 2021 by 40%, total operating expenses increased by 9%. As a percentage of operating revenue, total operating expenses improved by 11 percentage points, from 47% to 36%.
Operating leverage was largely driven by strong operating revenue growth, further margin improvements and disciplined cost management. Pushpay expects significant operating leverage to accrue as operating revenue continues to increase, while growth in total operating expenses remains low.

Pushpay adopted best-in-class software tools and scalable processes early in its development. Combined with strong financial discipline, these investments will allow significant operating leverage to be achieved as revenue grows.

[Nigelk]

Huge jump in revenue, increased margin and a big profit.
Will be interesting to hear what Ogg and the other doom merchants find wrong with it.
A steal at this weeks SP.

[BlackPeter]

Well, yes - both revenue as well as earnings went up, this is good - and even their NTA went from negative 4 cents per share to positive 1 cent per share. Lets start the celebration, shall we?

I guess a wee damper might be their underperformance compared to analyst earnings expectations - analyst consensus EPS for FY 2021 was 9 cents (NZ) per share. PPH delivered only 2.8 US cents per share, that's roughly NZ 4 cents.

Spot the difference? But hey - earnings still doubled last year and if they keep doubling every year, the current PE of something like 42 is clearly justified. However - what if not?

I guess it is just important to keep faith. But wait - aren't they in the faith industry? Lets hope they don't sell all of it, shall we?

[sb9]

Courtesy of poster SteveSage over on HC who beautifully explains the benefits of cross selling Pushpay seem to be doing so well and further opportunity in that space.

It seems the concept of cross-selling is a difficult one to understand

Customer Numbers		Mar-18	Sep-18	Mar-19	Sep-19	Mar-20	Sep-20	Mar-21
Donor Mgmt		7,276	7,420	7,649	7,905	8,180	8,489	8,927
Church Mgmt						4,158	4,236	4,625
Mutual customers						-1,442	-1,829	-2,453
Total		7,276	7,420	7,649	7,905	10,896	10,896	11,099
Customer number change (in the half)
Donor Mgmt			144	229	256	275	309	438
Church Mgmt						4,158	78	389
Mutual customers						-1,442	-387	-624
Total			144	229	256	2,991	0	203

In addition to adding 203 customers in the last 6 months, they cross sold to 624 customers between Donor mgmt and Church mgmt...and they have a huge client base yet to cross sell to (~8500 clients)