Ann: Pushpay 2019 Interim Report, page-32

Steve S

On the surface, reporting that you have succeeded in signing up 55 of the top 100 churches suggests a job well done and implies you are already dominant in the sector. Begs the question ‘how much scope for growth?’ as you have pointed out. Fortunately, this is misleading and in fact carries a big positive in terms of future marketing.

There are about 340000 churches in America of which about one third are considered large or medium according to the congregation size threshold. So about 113000 churches constituting our target market. As at PPH last report, we are currently contracted with 3800 churches in the ‘large to medium’ category, effectively giving us a market share in our target market of 3.4 percent. Based on this we have not even scratched the surface.

Haviing 55 of the Top 100 provides a wonderful endorsement of the product as we pursue greater market share....that old saying ‘success breeds success’ springs to mind.

Also, like to comment on your observations regarding sales & mktg expenses being high. My understanding is that PPH are taking particular care when ‘on boarding’ a new customer. Nearly 20 percent of the headcount   is categorised as ‘customer success’ and I read that on boarding a large church can take a couple of months. All good in terms of creating a sticky customer going forward.

I was particularly pleased with the latest half year result where they reported a 48 % increase in Revenue and only a 2 % increase in Operating Expenses. Despite being in the negative, the trajectory on Nett Profit is equally impressive (-$25m > -$12m > -$4m). 

Add Scale to the above, with the current high GP margin and a high component of recurring revenue, and the future looks extremely bright. Time for a new trajectory.....’EARNINGS’.

All in my opinion of course. DYOR

Rokewa