I missed this announcement back on July 5.   Shane Sampson has resigned as CFO, and will finish up on October 1.   Given he will serve out the full 3 months notice, it appears, there is nothing immediately untoward going on.  

 The recent retirement of the Chair, resignation of the CFO, and a new CEO ? This combination does make me nervous.  

DISC - I HOLD....

Along with the profit upgrade announced today, Pushpay announced the appointment of their new CEO, with Bruce Gordon stepping down as the interim CEO after 18 months.   

This is significant news for the business, and I like the fact they have promoted someone from inside the business.  CEO, Molly Matthews was the Chief Customer Officer, and has had a rapid rise in her 4 years at Pushpay.  To rise so rapidly within a business, she is learly a high performer, and she will know the business culture far better than an outsider.  Given her current role, I would say Molly understands Pushpay's customers better than anyone else.  

Capital allocation skills, strategy, execution are unknowns, but I would prefer an insider, who knows the business and it's customers, is appointed, particularly in the faith sector.  

The other significant announcement is Pushpay's pivot towards the US Catholic sector.  This has the potential to significantly increase Pushpay's TAM, however, it remaisn to be seen how successful their offering will be, given the older demographic, and centralised decisionmaking.   Sales cycles will be quite long, and a lot of implementation support will be required.  Catholic faith sector is a completely different to evangelical christians, as the Catholic sector has traditions that are centuries old, with decisionmaking usually made at a diocian level, rather than parish level.......I am a little sceptical of it succeeding.  

Key takeaways:

• COVID-19 accelerates transition to digital payemtns, with TPV increasing 48% on PCP.  The CEO advised share of donation spend increased from 40% to 60% over the half year.  
• ARPC (excl. CCB), increased approx. 16% on PCP.   
• Customer count was relatively flat, with a bit of churn in CCB customers.  CCB tended to have smaller customers, which tend to be higher churn. 
• 16 new product launched over the half, with ChurchStaq launched - its all in one church amangeent solution.  
• Management report cross selling is exceeding expectations, which they say validates the CCB acquisition, and they are seeking to build their platform with further acquisitions.
• Great operating leverage, allowing debt rasied to acquire CCB to be paid off over the next 12-18 months, with payments running at $2.4M per month. 
• Maanagement report sales pieline is lengthening due to COVID-19 with potential customers reluctant to switch platforms at such a critical / uncertain time.
• Analyst raised the question of shareholdings of the founders, and their plans.  A vague answer was given.  Thsi may weigh on the share price short term. 

In the AGM today, PPH have upgraded FY2021 forecast profit by 4%, and is experiencing increasing demand of their mobile platform.

Given Pushpay's market capitalisation is well above $1B, it ranks around 130 in terms of market capitalisation.   Assuming liquidity hurdles are achieved, Pushpay should enter the ASX 200 index in the June quarterly rebalance, and become an investible business for a number of passive and active funds.   

Outstanding results. Key takeaways:

1) COVID-19 is driving churches towards digital giving. 

2) Revenue (ex. CCB) grew 28% on constant currency basis.

3) Gross margins (ex. CCB) grew from 60% to 64%.

4) Expenses (ex. CCB acquisition) decreased 8%.

5) Outlook -

a) EBITDA to double next FY.

b) "strong" revenue growth to continue.

c) Looking for further strategic acquisitions to broaden platform.

d) Long term - targeting 50% of medium / large church segment, which represents $1 billion in potential revenue.

6) ARPC ex. CCB, at $1614 per month, up from $1315. Thats 22% growth. Nice.

7) no. of customers grew 43%. partly due to CCB acquisition.

"Due to the restrictions around in-person gatherings, Customers have been emphasising....digital giving...through their apps for continued engagement with their communities.....Pushpay’s processing volume over the month of March was higher than...expected.." Although, it is antiicpated demand for digital payments may moderate as restrictions are eased.   

Many improvements to the platform, improving engagemnt and value to customers.  

Interesting trend in Pushpay app downloads over the past few months.  It seems to tie in with management reporting churches are encouraging church goers to use electronic payments for tything......

Here is a comparison of PPH adj. cashflow against other software businesses

Note: Figures exclude Capture capitalisation (NEA), Stock based compensation (US), and software capitalisation.    

I am not 100% confident in the accuracy of my figures, but I think it is fairly accurate picture.............

Attached is a comparison of PPH vs local and Us software businesses.   PPH remains relatively inexpensive to other "stonks" 

Key takeaways:

Revenue growth: 31% yoy

NPAT growth:  247%, demonstrating powerful operating leverage.

Staff headcount up just 2% yoy

Months to recover CAC: increased to 21.7 months - Its getting harder to acquire customers.

Gross margin increases to 65% up form 57% a years ago - massive improvement. 

Average revenue per customer growth: 20% - falling but still impressive. 

TPV for 6 months: $2.2 b  (equates to a take rate of 2.55 % - was about 4% a few years back)

2nd Quarter is traditionally the strongest, with Xmas giving.  TPV forecast to be between $2.6 and $2.8 Billion. 

Long term (say 10 years), PPH is targeting US$1 billion in annual revenue.  Around 8x from here.

40% revenue growth on PCP + only 10% increase in operating costs = great leverage.

gross margins forecast to improve to 63%, allowing more revenue to trickle down to the bottom line. 

PPH has reached an inflection point.