Change Financial sees revenue growth in the December 2023 quarter

Change Financial have released an update on the company’s business activities for the quarter ended 31 December 2023 (Q2 FY24).

Q2 FY24 Highlights include:

• Customer receipts of US$1.8m (A$2.7m)
• Q2 FY24 revenue of US$2.3m (A$3.5m), up 14.8% on prior corresponding period (pcp)
• H1 FY24 revenue (unaudited) of US$4.5m (A$6.8m), up 5.0% on pcp
• More than 14,000 cards issued via Vertexon PaaS platform – significant PaaS revenue ramp up underway which will be a key factor in achieving the Company’s target of monthly cashflow breakeven run-rate exiting FY24
• New contract signed with existing client, HealthNow, to expand into Australia; HealthNow live in NZ with 3,000 prepaid cards issued to date
• PaaS clients Rolling Thunder and PlutusM now with live cards issued in the US
• Cash holdings of US$3.2m (A$4.8m) with no debt as at 31 December 2023 – excludes additional cash backed security guarantees of US$0.5m (A$0.8m)

During the quarter, Change made significant progress on launching and migrating clients to the Vertexon PaaS platform which is live in Australia, NZ and the US. Change has now issued cards to clients in NZ and the US, and BINs are live for Australian clients, Fintech Actuator and HealthNow, ahead of live cards being issued imminently. Transactional revenues are scaling up with the onboarding of clients and associated migration of cards.

Change CEO Tony Sheehan commented, “During the quarter our New Zealand PaaS clients commenced migrating cardholders to Change. We now have over 14,000 cards on the platform and will continue migrating cards to Change over the remainder of FY24. After a significant period of investment, we are now starting to generate transaction and volume-based revenue which is anticipated to grow strongly in the coming months as migrations continue.

“We have also launched the first prepaid card program on the platform in New Zealand, complementing the debit card programs of our financial institution clients. Additionally, two of our US PaaS clients are now live on the platform and have commenced processing transactions.

“Whilst Q2 revenue grew 14.8% versus prior year, this only includes a relatively small contribution from PaaS fees. We anticipate PaaS revenue to contribute meaningfully in H2 FY24. The migration of cards on to the platform and associated transaction and volume-based revenue generation marks a significant moment in our Company’s journey. We have made a significant investment in the platform and incurred material expense to ensure operational readiness. We are now well positioned to scale the platform, incurring only minimal incremental costs for key areas such as client onboarding, fraud management, risk, compliance and treasury as we grow our client base.

“We remain focused on building a strong and sustainable business which delivers profitable growth and continue to target a monthly cashflow breakeven run-rate exiting FY24. Scaling our PaaS platform will be a key driver in achieving our financial targets for FY24 and beyond.”