The Pushpay Holdings Ltd (ASX: PPH) share price has gone up around 5% after providing an investor update.
Pushpay is a business which provides donation tools and church management software for large and medium churches in the US.
Pushpay’s profit update
The ASX tech share has reconfirmed and narrowed its FY22 guidance range and also gave an update about its unallocated employee share scheme shares.
Pushpay’s update was about the year ending 31 March 2022. It now expects underlying EBITDAFI (EBITDA explained, it also accounts for other things like movement in foreign currency) to be in the range of US$61.5 million to US$63.5 million. Previously, the guidance was between US$60 million to US$65 million.
Excluding the costs associated with the investment into the Catholic initiative, where the company wants to win a 25% market share of that market, Pushpay expects to achieve underlying EBITDAFI for FY22 of between US$63.5 million to US$65.5 million.
Pushpay’s share price may be rising as investors realise it’s generating a solid profit this year.
Growth metrics
How much profit growth would this be if the guidance comes true? Pushpay revealed it would represent an increase of underlying EBITDAFI of between 6% to 10% compared to FY21.
Pushpay said that it continues to see positive year on year increases in processing volume performance in each trading month of FY22. The total processing volume for the 11 months to 28 February 2022 is up 10% compared to last year.
The ASX share also said that its strong operating cash flow continues to help it pay down debt, which was taken on to partially fund the Resi Media acquisition. Its net debt balance has reduced from US$90 million at August 2021 to US$54 million at 28 February 2022.
Employee share scheme
Pushpay also said that it intends to buy back the remaining 138,336 Pushpay shares currently held by the Pushpay Trustee as trustee for a legacy employee share scheme. It is then Pushpay’s intention to terminate the scheme and amalgamate the trustee into the company.
Final thoughts about the Pushpay share price
Despite rising almost 20% this month so far, Pushpay shares are still down 18% this year and 42% over the last six months.
Considering the business continues to see growth in donation volumes, solid cash flow and good underlying profit generation, I think that the Pushpay share price is a long-term opportunity. It’s one of the ASX growth shares on my watchlist.
