Smartpay (SPY) H1 2025 earnings summary

Executive summary

• Revenue increased 8% year-over-year to $50.8m for the six months ended 30 September 2024, driven by Australian market expansion and strategic investments in New Zealand, including a major terminal fleet acquisition.

• Operating cash flow reached $10.0m, supporting growth initiatives and asset acquisitions.

• Terminal fleet expanded to over 55,000 units across Australia and New Zealand, serving 40,000+ merchants.

• Advanced Stage 2 of the strategic plan in New Zealand, with over 2,000 terminals pre-signed and continued development for Stage 3, focusing on value-added solutions.

• Strategic progress includes launching New Zealand acquiring, executing key partnerships, and preparing for regulatory changes.

Financial highlights

• EBITDA was $8.8m (normalised $7.9m), down 8% year-over-year, with operating leverage at 15.4% of revenue.

• Profit before tax was $0.7m (normalised -$0.2m), down 81% year-over-year, impacted by higher operating expenses and strategic investments.

• Free cash flow of $4.1m used for acquisition, resulting in a net debt position of ($2.8m) at period end.

• Total transaction value processed reached $3.3bn, up from $3.0bn in 1H24.

• Cyber insurance recovery contributed $810,000–$930,000, offsetting some incremental costs.

Outlook and guidance

• New Zealand acquiring solution pilot to begin in early 2025, with revenue benefits from recent acquisitions expected in the second half.

• Strategic partnerships to deliver next-generation merchant ecosystem and POS/payment solutions across Australasia in FY26.

• RBA payments review in Australia expected to conclude by end 2025, with regulatory changes from early 2027; company prepared for potential surcharge ban.

• Operating leverage ratio expected to return to pre-New Zealand investment levels as NZ revenues come online.

• No further significant headcount increases anticipated for New Zealand; investment run rate expected at $2–2.5m per half.