PaySauce Limited Analysis

Overview

PaySauce is a multiple award-winning cloud-based FinTech business, delivering Software as a Service payroll solutions to small and medium sized enterprises ("SMEs").

PaySauce has a particular focus on agricultural SMEs. PaySauce enables SME owners to pay staff accurately and efficiently using web, iOS, and Android applications. The PaySauce platform includes mobile timesheets, payroll calculations, banking integration, PAYE filing, labour costing, automated general ledger entries and digital employment contracts

PaySauce was founded in 2015 by Asantha Wijeyeratne, a New Zealand FinTech entrepreneur with a record of success in building SME service businesses, and Troy Tarrant, a software architect and developer with a background in creating payroll and human resource solutions. Their vision is to take the Kiwi-grown PaySauce software platform to businesses around the globe, helping SME owners spend less time paying staff and more time doing what they love.

Performance

The following information was extracted from PaySauce Limited's half year results, released 27 November 2024:

PaySauce today reports 17% growth in revenue. Together with an acceleration in customer acquisition, growing customer numbers, processing fees and average revenues per user; PaySauce is making good progress towards its goal of $10m Annualised Recurring Revenue.

HIGHLIGHTS

• Annualised Recurring Revenue (ARR): $8.7m up 17% following an increase in customer numbers and a 13% increase in ARPU
• Total recurring revenue: $4.3m up 20%
• Customer numbers: 7,821 up 9%, with rate of customer recruitment accelerating; new customers up 12%
• Total customer lifetime value: $50.5m up 24%
• Net profit after tax (NPAT): $70k up $337k

FINANCIAL PERFORMANCE

Recurring revenue for the 6 months to September 2024 grew 20% to $4.3m from $3.6m in the previous year. With interest rates stabilising over the last 12 months, the majority (71%) of the revenue growth this period came from growth in our processing fee revenue which totalled $3.0m for the 6 month period, up $0.5m (20%) year on year. Interest revenue increased proportionately, up $0.2m (20%) on the previous comparable period (6 months to September 2023).

The increased processing fee revenue arose from two key areas: Firstly, the sales and marketing activity yielded accelerated growth in customers numbers, up 9% year on year to 7,821 as at September 2024. Secondly, the monthly average processing fees per customer increased 13% year on year to $67 (from $60).

Expenses increased 20% year on year from $3.4m to $4.0m as we grew our headcount and increased investment for growth including investment in brand and expanded our sales efforts.

EBTDA increased to $548k from $255k at the same time a year ago and as a proportion of sales, increased to 13% from 7% a year ago. Net profit after tax (NPAT) increased to $70k for the 6 month period to September 2024, an improvement of $337k on the same 6 month period last year, and reflects the continuation of sustainable growth achieved.