2020 Annual Meeting Addresses

2020 Annual Meeting Address  
18 SEPTEMBER 2020 - LOWER HUTT, NZ  
Chair’s Address  
 
Tēnā koutou katoa, good morning everyone and welcome to the Annual PaySauce             
Shareholders Meeting. My name is Nick Lewis, and I have been the Chair of PaySauce                
since January of this year.  
 
What an eventful year it has been, between new partnerships, shareholders and staff, a               
major capital raise, and of course, responding to a global pandemic.  
 
Asantha and his amazing team have put in a lot of work to keep things moving and                  
growing, and have produced exceptional results both in customer and revenue growth,             
as well as made great progress with our team and operations.  
 
There have been several changes at a board level as I mentioned earlier, bringing new                
views and ideas into the picture, and we look forward to not only supporting but also                 
constructively challenging Asantha and his team.  
 
Launched in March we successfully concluded our first rights issue raising $5.8M of new               
capital in May. We are humbled and proud that the rights issue was not only successful                 
but even oversubscribed, and we raised new capital from both our existing and new               
shareholders.   
 
We welcome our new owners and thank you all for your support. This new capital will                 
fund our growth and move PaySauce closer to achieving financial break-even.   
 
It is fair to say that COVID has required us to re-prioritise some of our objectives. Most                  
notably, we paused our expansion into Ireland until there is more certainty and we can                
travel overseas. In the meantime, we have plenty of opportunities in New Zealand.   
 
We are strengthening our core offering to help move PaySauce from startup to scaleup.               
This new stronger platform will enable us to expand and solidify our New Zealand               
presence as well as facilitate international expansion once we can expand overseas.  
 
We also appointed a new CFO in February, Jaime Monaghan, who joined us from Trade                
Me where she had been Head of Insurance. You will hear from Jaime shortly, but she has                  
already proven to be an invaluable addition to the executive team by introducing more               
structure, implementing strategy, and refining our financial decision making and           
processes.   
 
We have maintained strong growth during 2020 in the face of challenging economic              
conditions, reaching $1.86M of Annualised Recurring Revenue (ARR), and approximately           
2,500 clients as at 31 March 2020.   
 
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Once again, the New Zealand agri sector has taken care of PaySauce. As an essential                
industry where social distancing comes naturally, farming was relatively unscathed by            
COVID. Whilst COVID caused many employers to reduce their workforces or close their              
businesses, we have not only retained almost our entire customer base but have even               
seen net employer growth on the PaySauce platform.   
 
Our Marketing and Sales teams have had their hands full with the planning, launch and                
expansion of the Xero, Figured and PaySauce joint offering. This proposition went live on 1                
June and has been rolled out through accounting practises and bookkeepers nationwide.   
 
This joint initiative not only strengthens our ties to two of the nation’s leading business                
software innovators but also establishes PaySauce’s credibility and relationships with the            
financial and accounting advisory sector.  
  
For example, our Annual Report last year was all about cows because we were growing so                 
quickly in the dairy sector. That growth in dairy continues, but we are now also seeing                 
more non-dairy (but still mostly rural) employers joining PaySauce. In other words, the              
word is spreading in the provinces.  
 
 
 
CEO’s Address  
 
As Nick mentioned, and as we’re all aware, it’s been a year of unexpected challenges, but                 
that really just makes me appreciate our wins all the more. And we’ve had some major                 
wins. This year we’ve been honoured to receive major recognition in some of the nation’s                
most prestigious business awards.  
 
We were finalists at the 2020 Hi-Tech Awards in two categories, Best Hi-Tech Agritech               
Solution and Innovative Hi-Tech Software Solution. We are also a Gold Awards finalist for               
the second year running in the Cyber Category. This placed us alongside some of the                
nation’s smartest and most innovative businesses, and to be acknowledged as one of              
them is extremely rewarding.   
 
On the partnerships front, we’ve successfully launched the pioneering Xero, Figured and             
PaySauce joint offering, a game-changer for forward-looking farming. Xero and Figured            
are both incredible Kiwi success stories who have done ground-breaking work at home              
and overseas, and we’re pretty proud that they want to work with us. Rolling out the                 
partnership has also upskilled the team in digital sales and product education, as the               
campaign has been conducted almost entirely through webinars and digital collateral. As             
we settle into the “new normal” in the wake of the pandemic, these skills will continue to                  
serve us well.  
 
As always, our recent successes would never have been possible without the hard work of                
our incredible team. We were lucky enough to bring Jaime Monaghan on board early in                
2020 as our new CFO, and since her arrival, our decision making is more efficient and                 
outcome-driven than ever. I’m very proud of our executive team’s balance of perspectives              
and combined level of experience, keeping each other grounded while remaining            
ambitious and uncompromising.   
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We’ve also welcomed crucial additions to our support team, helping us to uphold the               
exceptional level of service we’re well-known for. Our first official Summer of Tech              
internship program was a roaring success, as both of our interns, Paddy and Larissa, have                
now joined us full-time, significantly strengthening our development team to enable us             
to build fresh innovations.   
 
As always, we’re committed to being a socially responsible business as we continue to               
grow. We remain an accredited Living Wage employer and a SuperHero sponsor of the 1%                
Collective. We’ve also dedicated significant development time to two major ethical            
initiatives, PaySimple and Payroll Giving. PaySimple was developed rapidly in response to             
the emergence of COVID-19, as small businesses around the country urgently required a              
digital solution for running payroll. We built PaySimple within two weeks, delivering a free               
“essentials-only” version of our software product with support from our partners in the              
accounting space.  
 
With Payroll Giving, we’re providing a simple, fast way for our thousands of employee               
users to contribute to charities and instantly claim their 33% tax rebate. We now offer                
more than 30 charities for donors to choose from and have featured awesome Kiwi               
organisations like the Cancer Society in support of Daffodil Day.  
 
While we have a generous side, we are ultimately a business and our goal is to create                  
returns for you, our shareholders. And I’m happy to report that we’ve had a highly                
successful year on that front, especially given the adverse economic circumstances            
created by the ongoing global pandemic. We’ve made significant progress towards            
becoming cash-flow positive and we’ve continued to see healthy customer growth. I’m             
delighted to inform you we crossed the milestone of 3,000 customers by the end of                
August. Many of our newest customers have come from adviser partners signing up their               
clients to PaySauce after discovering us through our work with Xero and Figured. Our               
success with agri employers has come from relationships and word of mouth, earning              
trust and credibility in that space, and our association with Xero and Figured is now                
helping us to create that same trust in the business advisory world.  
 
While we’re exploring new avenues for attracting customers, retention remains equally as             
important for the health of our business. To keep our customers, especially during tough               
times, we have to keep them happy. We’ve made significant improvements in our              
systems and processes, accelerating our onboarding experience and the speed of our             
resolution of customer queries. Our most recent NPS score was 56, and once again we’re                
happy to report that this is well above the global average of 30 for SaaS businesses.                 
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Creating customer happiness is part of our purpose as a company, but also boosts loyalty,                
generates excellent word-of-mouth and is an essential part of our growth.   
  
1
Retently 2020 NPS Benchmarking - https://www.retently.com/blog/good-net-promoter-score/  
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Financials  
 
I’m happy to say that the audit for the year to March 2020 has been signed off with an                    
unmodified opinion and that we continue to refine our reporting as we grow and develop                
as a SaaS business and a company. I want to say a huge thanks to the team, and Grant                    
Thornton our Auditors for all of the hard work getting this over the line during a very                  
difficult period in April and May this year.  
 
As Nick mentioned earlier, we saw another strong year of revenue growth with GAAP               
reported revenue up 93% from $0.92M in the 2019 to $1.77M in the year ending March                 
2020. The majority of this was recurring revenue from customers, though there was a               
portion of non-recurring revenue too - the most notable of which being the IRD subsidy -                 
which ceased as of the 1st of April this year. One of the most material changes made to                   
our SaaS reporting this year was the removal of the IRD subsidy from our recurring                
revenue. This is to provide a clearer picture of the year on year recurring revenue growth                 
and associated SaaS metrics. Processing Fees and Interest received are now the only two               
components of recurring revenue for PaySauce.   
  
There were two minor anomalies in the document. Firstly, the SaaS reporting metrics on               
pages 14 and 15 of the annual report include a table which illustrates the impact of the                  
change in methodology for calculating the SaaS metrics. The figures in the “2019 Before               
Adjustment” column did not correctly show the values reported in the year ended March               
2019. The more relevant values in that table are those in the “2019 Restated” column, and                 
these correctly reflected the 2019 values restated to the methodology used in 2020.   
 
Secondly, there was an error in the “Spread of security holders” table on page 79 of the                  
annual report. The descriptions for the size of holdings are out by a factor of ten, but the                   
purpose of the table is to illustrate the concentration of shareholders and these              
percentages are correct.  
 
At PaySauce, we value the strong engagement we have both directly with you, our               
shareholders, and the New Zealand Shareholders Association. The feedback we receive            
from you helps us shape our reporting to ensure it gives you the information you require                 
as shareholders.   
 
You saw on Asantha’s slide earlier, that customer numbers grew by 80% from almost               
1,400 in March 2019 to almost 2,500 in March 2020. This was a combined result of                 
continued word of mouth referrals as our agri customers spread the word to other               
businesses in rural locations, as well as increased investment in customer acquisition as              
we honed in on accounting partner referrals. We look forward to continued growth from               
our partnerships, which of course includes the Xero, Figured and PaySauce combined             
product offering.  
 
Onto our metrics, our ARR (or Annualised Recurring Revenue) grew from $837K as at 31                
March 2019 to $1.86M as at 31 March 2020. Our monthly ARPU (Average Revenue per User)                 
remained consistent year on year - despite the removal of the IRD subsidy and the                
decrease in yield on customer funds held due to decreased interest rates. This is a result                 
of the price increase that we implemented in late 2019 to soften the impact on our                 
recurring revenue. With the large majority of our recurring revenue now derived directly              
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from processing fees charged, we are less reliant on other conditions outside of our               
control. We are also extremely pleased to see that despite this price increase, we have                
seen a decrease in churn year on year to 1.26% monthly, or 15% annually. This reinforces for                  
us that our customers are happy to pay for a quality product that is continually being                 
improved and advanced as we grow.  
 
Fast forward 3 months to our quarter ended June 2020, where we reached a customer                
base of 2,824, which was a 41% increase from the same period last year. It’s important to                  
note the increase is in comparison to a very high base due to the impact of payday filing                   
becoming mandatory in April 2019.   
 
This led to an increase in recurring revenue to $450K for the quarter ended June 2020,                 
which was a 54% increase from the same period last year. We are really pleased to see this                   
momentum continue, and look forward to sharing our half-year results for the period              
ended 30 September 2020, when our interim report will be completed in November.  
 
ENDS  
 
 
ABOUT PAYSAUCE  
 
PaySauce is software at work for people, providing employment solutions to small and              
medium-sized businesses. PaySauce enables business owners to pay and manage           
employees accurately and efficiently using the web, iOS, and Android applications. The             
PaySauce platform includes mobile timesheets, payroll calculations, banking integration,          
PAYE filing, labour costing, automated general ledger entries and digital employment            
contracts.  
www.paysauce.com  
 
CONTACT  
Please direct any investment queries to investor@paysauce.com.  
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Annual Shareholders’ Meeting
18 September 2020
1

Chair’s Introduction
Nick Lewis
Non-Executive Director, Chair
(Independent)
2

Disclaimer
●The information in this presentation is of a general nature and does not constitute financial product advice, investment
advice or any other recommendation. Nothing in this presentation constitutes legal, financial, tax or other advice.
●This presentation should be read in conjunction with, and is subject to PaySauce’s Annual Report, market releases and
information published on PaySauce’s website - www.paysauce.com
●This presentation may contain forward looking statements about PaySauce and the environment in which PaySauce
operates, which are subject to uncertainties and elements outside of PaySauce’s control - PaySauce’s actual results or
performance may differ materially from these statements. PaySauce gives no warranty or representation as to its future
financial performance or any future matter.
●This presentation may include statements relating to past performance, which should not be regarded as a reliable
indicator for future performance.
●This presentation may include information from third parties believed to be reliable; however, no representations or
warranties are made as to the accuracy or completeness of such information.
●While reasonable care has been taken in compiling this presentation, none of PaySauce nor its subsidiaries, directors,
employees, agents or advisors (to the maximum extent permitted by law) gives any warranty or representation (express or
implied) as to the accuracy, completeness or reliability of the information contained in it, nor takes any responsibility for it.
The information in this presentation has not been and will not be independently verified or audited.
●No person is under any obligation to update this presentation at any time after its release to you or provide you with
further information about PaySauce.
Please refer to the Appendix for definitions of key metrics used in this presentation.
All currency amounts are in New Zealand Dollars unless stated otherwise.
Disclaimer
3

Nick Lewis
Non-Executive Director
(Independent), Chair
VOTE
Michael O’Donnell
Independent Non-Executive Director
(Proposed)
VOTE
Board of Directors
Asantha Wijeyeratne
CEO & Co-Founder, Director
(Non-Independent)
Gavin Thompson
Non-Executive Director
(Non-Independent)
Mandy Simpson (Retiring)
Non-Executive Director
(Independent), Chair of Audit
& Risk Committee
Jacqueline Robertson Cheyne
Non-Executive Director
(Independent)
VOTE
4

Agenda
Chair’s Introduction
CEO’s Address
Financials
Resolutions
Other Business & Shareholder Questions
5

Strengthened
the team
through an
internship
program
Highlights for the year
Fully
subscribed
Rights Issue
raised $5.8m
capital
Continued
strong
revenue and
customer
growth
Xero, Figured,
PaySauce
offering live to
market
6

CEO’s Address
Asantha Wijeyeratne
CEO/Co-founder & Director
(Non-Independent)
7

Highlights
8

Executive Team
Asantha Wijeyeratne
CEO & Co-Founder
Troy Tarrant
CTO & Co-Founder
Jaime Monaghan
CFO
Mat Stokes
COO
Team Growth
12 New Teammates in 2020
9

Community Good
Living Wage
Accredited Employer
One Percent Collective
Superhero Sponsor
PaySimple
Free Online Payroll
Payroll Giving
30+ Charities
10

Customer Growth
to 31 March 2020
1,384
80%
increase from 31
March 2020
2,492
11

Customer Love
56
NPS SCORE
Net promoter score at 28 February 2020
“ It's so easy to use, I work off farm and just
don't have the time to sort out all our GST,
payslips etc. With PaySauce I know
everything is being done correctly.”
“ Excellent support service when we
require it. Fantastic easy app for staff...
Love love love it!!!”
“ It's so easy to use, for us as employers, it's
great to be able to check through weekly
hours, and the staff are enjoying using it
as well.”
12

Financials
Jaime Monaghan
Chief Financial Officer
13

GAAP Revenue Growth
to 31 March 2020
93%
increase from 31
March 2020
14
$1.775M
$0.921M

Metrics
to 31 March 2020
ARPU
Average revenue per user (monthly) as
at 31 March 2020
$62
Churn
Customer churn % as at 31 March 2020
1.26%
(monthly)
15.12%
(annualised)

15

Customer Growth
to 30 June 2020
Increase due to
payday filing
requirement for
employers
41%
Year on year growth
for Q1 FY2020
16

Quarterly Recurring Revenue Growth
to 30 June 2020
Increase due to
payday filing
requirement for
employers
54%
Year on year growth
for Q1 FY2020
17

Resolutions
Nick Lewis
Non-Executive Director, Chair
(Independent)
18

Resolution A
Having retired, that Nick Lewis be
re-elected as a Director of
PaySauce.

Nick Lewis
Independent Non-Executive
Director, Chair
FOR
AGAINST
ABSTAIN
19

Resolution B
That Jacqueline Robertson Cheyne
be elected as a Director of
PaySauce.

Jacqueline Robertson Cheyne
Independent Non-Executive Director,
Chair of Audit & Risk Committee
Effective 1 October 2020
FOR
AGAINST
ABSTAIN
20

Resolution C
That Michael O’Donnell be elected
as a Director of PaySauce effective
from 1 October 2020.

Michael O’Donnell
Independent Non-Executive Director
(Proposed)
FOR
AGAINST
ABSTAIN
21

Resolution D
That the maximum aggregate amount
of remuneration payable by PaySauce
to all Directors (in their capacity as
Directors) be increased from $125,000
per annum to a maximum of $190,000
(plus GST, if any) per annum, with this
sum available to be paid to the
Directors of the Company as the Board
considers appropriate.

FOR
AGAINST
ABSTAIN
22

Resolution E
That the Board is authorised to fix
the fees and expenses of Grant
Thornton as the auditor of
PaySauce.
FOR
AGAINST
ABSTAIN
23

General Business
The meeting is now open to any
general questions
?
24

Thank You!
25

Appendix
NPS: The net promoter score is an index ranging from -100 to 100 that measures the willingness of customers to recommend a
company's products or services to others.
Recurring Revenue: Recurring revenue is revenue that is expected to repeat each period into the future. For PaySauce, this is
revenue directly linked to the number of payroll customers we have.
MRR: Monthly recurring revenue is the total recurring revenue for the month.
QRR: Quarterly recurring revenue is the total recurring revenue for the quarter.
ARR: Annual recurring revenue is the MRR, multiplied by 12.
Churn: Churn is expressed as a percentage, and is calculated as the number of cancellations for the period divided by the total
number of customers.
ARPU (monthly): Average revenue per user (monthly) is total recurring revenue, divided by the total number of customers
processing payroll.
Note - the terms and metrics above are Non-Generally Accepted Accounting Principles (non-GAAP) measures and should not be
viewed in isolation, not considered substitutes for measures reported in accordance with New Zealand Equivalents to International
Financial Reporting Standards (NZ IFRS).
Definitions of Key SaaS Terms & Metrics
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