Here’s Why Pushpay (ASX:PPH) Shares Are Up 5%

January 7, 2019

Jaz Harrison

Jaz is a Staff Writer for Rask. She is a keen investor who loves to thoroughly poke holes in an investment idea before it has a chance of making it into her portfolio. Jaz invests for the long-term and doesn't sweat the small stuff. She strongly believes that empowering people with knowledge is the best way for them to take charge of their finances, which is exactly the approach she takes with her own money and investments.

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The Pushpay Holdings Ltd (ASX: PPH) share price is up 5% after the Kiwi technology business announced it has reached cash flow breakeven.

Pushpay is a New Zealand based donation systems and software business for religious, not-for-profits and education providers in the US, Canada, Australia and New Zealand. Pushpay is used by over 7000 churches worldwide. The average gift is $192.

Pushpay announces it is cash flow breakeven

Pushpay said that it has achieved its target of breakeven on a monthly cash flow basis prior to the end of calendar year 2018.

The donation business said that it was EBITDAF (click here to learn what EBITDA means) (the F stands for foreign currency gains & losses) and cash flow positive for the quarter ended 31 December 2018,

Management also said it will have positive cash flows on an ongoing basis.

Pushpay revealed that annualised processing volume grew from US$3.2 billion at 30 September 2018 to over US$5 billion at 31 December 2018. Excluding the seasonal high period which falls in the last three weeks of December, it grew to $US4 billion at 10 December 2018.

It expects to achieve its revenue guidance of between US$97.5 million to $US100.5 million for the year ending 31 March 2019, with a gross margin above 60% and positive EBITDAF.

Pushpay CEO and co-founder Chris Heaslip said:

“Given the strength of the underlying business, Pushpay is well positioned to capitalise on opportunities to accelerate growth, including potential acquisitions that add significant value to the current business.”

Is the Pushpay share price a buy?

Reaching breakeven is an important step for all technology businesses (indeed, for any business) and it should mean they are sustainable going forwards. Pushpay has fallen about 25% over the past six months. That fall, combined with today’s news, could mean Pushpay could be worth a spot on your watchlist.

Pushpay isn’t the only small cap delivering impressive growth.

FREE REPORT: 2 Fast Growth ASX Small Caps For 2019

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