Pushpay shares hit record as growth story continues

More American churchgoers are turning to Pushpay to participate in worship as Covid-19 bites. Photo / 123RF

Pushpay Holdings shares jumped to a record after the company said it expects its rapid pace of growth to continue as Covid-19 restrictions see more American churchgoers turn to its digital platform to participate in worship.

Earnings before interest, tax, depreciation, amortisation and foreign currency movements rose to US$25.1 million ($41.4m) in the 12 months ended March 31 from US$1.6m a year earlier. Revenue was up 33 per cent at US$127.5m and gross margin widened to 65 per cent from 60 per cent.

That pace of growth is expected to accelerate, with the company predicting "strong" revenue growth and forecasting ebitdaf of between US$48m and US$52m in the March 2021 year.

"In the long term, Pushpay is targeting over 50 per cent of the medium and large church segments, an opportunity representing over US$1 billion in annual revenue," it said in a statement.

The shares rose 16.5 per cent to $5.30, valuing the company at $1.46b.

Investors looked through a 15 per cent decline in net profit to US$16m, with the year-earlier figure flattered by a one-off tax benefit and deferred spending on research and development.

The company has been one of the beneficiaries of Covid-19 restrictions as its church customers relied on live-streaming and digital giving to replace traditional services.

"Pushpay expects the increase in digital giving as a proportion of total giving resulting from Covid-19 to outweigh any potential fall in total giving to the US faith sector," it said.

Some US$5b of payments were processed through its platform in the period, up from US$3.6b a year earlier, while customer numbers climbed 42 per cent to 10,896. Its monthly average revenue per customer was largely unchanged at US$1,317.

Pushpay completed its US$87.5m acquisition of Church Community Builder in December, adding a new platform that churches use to interact with their members and oversee basic administration.

The company said it's also eyeing other potential acquisitions to broaden its suite of services, noting that its rising cash flow gave it the flexibility to do so.

Operating cash flow climbed to US$23.5m in the year from US$2.8m. After financing and investment spending, Pushpay had US$7.2m in the bank.

Operating expenses rose just 5 per cent to US$65.7m, while product design and development costs were up 1 per cent at US$17.2m.

Pushpay's workforce grew to 459 at the end of March from 389 a year earlier, largely due to the addition of Church Community Builder. Of that, 101 staff are in New Zealand and 358 in the US.