ASX fintech shares have delivered some stellar returns to shareholders over the last few years. Just look at the recent success of growth companies like Afterpay Ltd (ASX: APT) and EML Payments Ltd (ASX: EML). They might be volatile, but they've made their longer-term shareholders very happy. Afterpay has become a real force on the ASX and its market cap has grown to a staggering $10 billion.
Is this the best new ASX fintech?
But the most exciting fintech on the ASX might be one you've never heard of. Pushpay Holdings Ltd (ASX: PPH) is a junior fintech that develops mobile apps and payment platforms for churches with a particular focus on the US faith sector.
Pushpay provides churches with the tools to create online "engagement centres", which are almost like social media platforms through which they can communicate with members of its congregation.
But, more than that, it allows church members to make donations to the church through its platform. People can make one-off donations or set up recurring payments. And on the backend, it provides detailed analytics of donor behaviour to churches, who can use this information to target fundraising initiatives. Pushpay generates revenue from these arrangements through both subscription and transaction fees.
Pushpay released its interim results covering the six months ended 30 September 2019 to the market back in November. In it, the company reported a 30% increase in revenues against the prior comparative period to US$57.4 million. It also delivered significant gross margin expansion of 8 percentage points to 65%, and net profit after tax increased by 247% to US$6.5 million.
Pushpay also expects these rates of growth to continue throughout FY20. It reiterated its full-year revenue guidance of between US$121 million and US$124 million. Total processing volumes are expected to be in the range of US$4.8 billion and US$5 billion for the year.
But this is still just the tip of the iceberg. Over the longer-term, Pushpay says it is hoping to reach 50% of the medium and large church segments in the US. If it can achieve this level of market penetration, the company claims it could represent a whopping US $1 billion in annual revenues.
Foolish takeaway
As the coronavirus causes panic to sweep through the market, it's important to focus on the long-term. In times of volatility, it is often growth companies that are the hardest hit, as cautious investors take their profits off the table.
But times like these can also present great buying opportunities to snap up shares in promising companies at a substantial discount.
As a digital company with a focus on the US market, Pushpay should be largely immune from the coronavirus. In fact, there is even the possibility that transaction volumes through its platform may even increase, as churches conduct fundraising initiatives to help raise money to support overseas communities affected by the virus.
For any opportunistic investors with cash to spare and who are looking to pick up cheap shares during this current downturn, Pushpay might be one to add to your shopping list.
