Westpay (WPAY) Q4 2021 earnings summary

Executive summary

• Revenue grew to SEK 53.7m in 2021 from SEK 52.8m; business expanded each quarter, while recurring revenue and gross margin remained at record-high levels.

• Strategic focus remains scalable growth, with a larger future contribution expected from recurring service and transaction revenue, which carries higher gross margins than system sales.

Financial highlights

• Net sales were SEK 53.706m vs SEK 52.809m; total operating income was SEK 63.029m vs SEK 63.016m.

• Operating loss was SEK 18.557m vs SEK 11.712m; net loss was SEK 19.057m vs SEK 13.853m.

• Inventory write-down of SEK 6.662m was a non-recurring Q4 charge; excluding it, gross margin was 71%, versus 58.6% reported for FY 2021.

• Operating cash flow was SEK 2.130m vs SEK -3.950m; year-end cash was SEK 12.481m vs SEK 0.952m.

Outlook and guidance

• Long-term financial targets: average annual sales growth above 20% and average EBITDA margin of at least 10%.

• Investments planned in products, technology, sales and certifications to support growth, customer and partner alliances, and competitive advantage.

• Orders from several key customers for payment infrastructure and related services carry SEK 40m TCV over three years, with deliveries beginning progressively in 2022.

• Following removal of most COVID-19 restrictions on 9 February 2022, COVID-19 was assessed as no longer presenting substantial uncertainty or negative economic risk for 2022.