The Pushpay Holdings Ltd (ASX: PPH) share price will be one to watch on Friday after the payments company updated its FY 2020 guidance.
What did Pushpay announce?
This morning Pushpay announced that it would be revising its guidance for revenue and earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) for the 12 months ending March 31 2020.
According to the release, the company now expects operating revenue to be between US$121 million and US$124 million in FY 2020. This is a slight downgrade from its previous guidance for operating revenue in the range of US$122.5 million to US$125.5 million.
The company's CEO, Bruce Gordon, blamed the revenue downgrade on softer customer acquisitions.
He said, "As previously indicated at our 2019 Annual Meeting, new customer acquisition over the start of the financial year was lower than the previous year. We have subsequently adjusted our operating revenue guidance range to reflect this."
Despite this softer revenue, management has upgraded its EBITDAF guidance for the full year to be in the range of US$23 million and US$25 million. This compares to its previous EBITDAF guidance of US$18.5 million to US$20.5 million.
It will also be a major lift on FY 2019's EBITDAF of US$1.6 million.
Management advised that its cost growth was originally expected to be in the mid-single digits, but cost efficiencies achieved in recent months are now expected to generate slightly lower costs in the second half of the financial year.
Combined with the accounting impacts of IFRS 16, the cost efficiencies are expected to result in lower expenses year-on-year, which has led to the increase in its guidance forecast.
In addition to this, Pushpay reiterated its gross margin guidance of over 63% and Total Processing Volume guidance of between US$4.8 billion and US$5.0 billion.
