2021 Annual Shareholders Meeting Addresses and Presentation

2021 Annual Meeting Addresses
24 SEPTEMBER 2021 - LOWER HUTT, NZ
Chair’s Address
It’sbeenanincredibleyearforPaySauceandthecarefulexecutionofourstrategic
objectiveshasyieldedverysatisfyingresults.We’veseencontinuedstronggrowth,
reaching$2.4MofAnnualisedRecurringRevenue(ARR),withapproximately3,400clients
as at 31 March 2021 and continued healthy growth since then.
Newpartnershipsandnewproductofferingshavecontributedtoorganiccustomer
growthandourfirstacquisitionofSmoothPayhasexpandedourcustomerbasebeyond
NewZealand.Asanthaandtheteamhavedoneanexcellentjobinadvancingourjourney
fromstart-uptoscaleup.Wearen’tjustanagripayrollprovideranymore,butabonafide
FinTech working hard to facilitate the interaction between employers and employees.
COVID-19impactedourabilitytoexpandPaySaucetoIreland,sowefocusedoureffortsin
NewZealand.Weachievedinternationalexpansionthroughtheacquisitionofthe
businessandassetsofSmoothPayinJune2021.SmoothPayprovidescloudpayroll
servicestocustomersinNewZealand,AustraliaandthePacificIslands.Aswellasaraftof
newpayrollcustomers,thisacquisitionhasbroughtnewteammembers,notably
SmoothPay’sfounderMatthewGardner.AsaseniorpayrolldeveloperMattaddsawealth
ofinstitutionalknowledgeandexpertiseonprogrammingforcomplianceinother
jurisdictions to the team.
We’vereleasednewproductsandfeatures,suchasRosteringandPayNow.PayNowisan
innovativeproductdeliveredinpartnershipwithBNZandisavailabletoallofour
customerstohelpcombatpredatorypaydaylenders.That’sbeenapassionprojectfor
Asantha, so I’ll let him talk more about that shortly.
TherecentCOVID-relatedrestrictionsdisruptedouroperations,buttheBusiness
ContinuityPlanprovedeffectiveonceagain.We’dhavepreferredtoseeyouallfaceto
face again today, but will have to wait another year.
Finally,youwillhaveseenthatIwillretirefromthePaySauceBoardnextFridayon1
October 2021 as I begin to reduce my work-life in general.
Ithasbeenanabsolutehonourtobeapartofthisamazingcompanyonitsinspiring
journey.
Iwanttoclosewithmyheartfeltgratitude.Tomyfellowshareholderswhohave
continuedtosupportPaySauce,toourpartnerswhoprovidefantasticofferingstoour
mutualcustomers,tomyfellowdirectorswhospeaktheirmindsyetworktoacommon
objective,totheexecutiveteamwhocontinuetoexecuteourgrowthstrategysowell,and
tothefantasticpeoplewhoworktirelesslyatPaySauceeveryday,Isay“thankyou”.Most
importantly,Ideeplyappreciateyourgivingmethisopportunity,Asantha.Youarethe
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verydefinitionofaselflessleader.Iwillmissourchatsaswedealtwithourchallenges
and opportunities.
PaySauceremainsinsafehandswiththesameDirectorsandmanagementteam.MOD
willtakeoverasourInterimChairnextweek.ThankyouMOD.Withyourexpertisein
SaaScompaniesandyourextensivegovernanceexperience,PaySaucewillbeverywell
served with you as our new governance leader.
CEO’s Address
As Nick mentioned - it really has been another great year for PaySauce.
We’vecontinuedtolistentoourcustomersanduseourtechnicalexpertisetoreduce
theiremploymentfriction.Ourrosteringappwasbornfromcustomerdemandforatool
thatschedulesstaffinghoursandintegrateswithpayroll.We’llcontinuetoevolvethat
producttofittheneedsofbothouremployercustomersandtheiremployees.We’ve
recognisedtheimportanceofemployeesonthePaySauceplatform.Atover20,000
employees,theyoutnumbertheclientsby5:1!Bymakingsuretolookafterourcustomers'
employeesandaddvaluewherepossible,wecreatemoreadvocatesforPaySauceinthe
market.
ThisfocusonemployeeswasakeydriverbehindourlaunchofPayNow.Weareso
accustomedtoconvenienceandfreedomasconsumers,butpayrollisstilloperatingon
anoutdatedmodel.Itseemsobviousthatemployeesshouldhavetoaccesstheirown
moneywhentheyneedit,irrespectiveofwhotheyortheiremployerbankswith.PayNow
meansthatemployeespaidthroughthePaySauceplatformcanaccessthewagesthey
haveearnedbeforepaydaytocoveranunexpectedexpense.Carsbreakdownand
childrengetsick-PayNowprovidesemployeesaccesstotheirwageswithoutbeinghitby
theextortionatelyhighinterestandfeesassociatedwithpredatorypaydaylenders.With
thecrucialsupportprovidedbyBNZ,we’reabletoprovideworkingKiwiswiththis
freedomandautonomy,withoutplacingstrainonsmallbusinesses.Weofferthisservice
completelyfreeofcharge,arealgamechangerandsomethingI’mpersonallythrilled
about.Thisisaworkingexampleofhowwecandeliversolutionsdirectlytoemployees
independentoftheemployer.Ifweweretomonetisethesesolutions,weareableto
significantly increase our Total Addressable Market (TAM) by a factor of 5.
Expansionthroughpartnershipsremainscriticaltoourgrowth.Wecontinuetopartner
withXeroandFiguredtoproducetheXeroforFarmingpackage.Thisproductsuitegives
farmersthetoolstobettermanagetheirfarms.Workingcloselywithestablished
networksintheindustry-FederatedFarmers,DairyNZandDairyWomen'sNetworkto
namethree-ensureswecontinuetoreachmoreoftheruralsectors.Thesupportshown
fromthissectorhasbeensubstantialandthegrowthofPaySaucehasbeenevidentin
the rural regions of New Zealand as a result.
Howeveranincreasingproportionofourgrowthisnowcomingfromnon-ruralsectors,
withotherindustriescomingonboard,rangingfromhospitality,retailandprofessional
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sportsunionstohealthcare,transportandconstruction.We’recontinuingtoevolvefrom
an Agri Payroll provider to a FinTech now reaching other industries with diverse offerings.
We’rediversifyingourcustomerbasenotjustbyindustry,butbyjurisdictiontoo.The
SmoothPayacquisitionhasbeenamilestoneeventforus.Havingthatfirstoverseas
customerwasoneoftheoriginalgoalsandwe’vefinallydonethatwiththeacquisitionof
SmoothPay,growingourcustomerbasebeyondNewZealandtoAustraliaandthePacific
Islands.WewillnowfocusongrowingthatrevenuefrommarketsoutsideofNew
Zealand. I am thrilled to have Matt Gardner and the team joining us on our journey.
WeareacutelyawarethatwhilePaySaucecontinuestoexpand,therearemany
businessesinNewZealandfindingthecurrentCOVIDsituationchallenging.Wefeelfor
ourcustomers,suppliers,partnersandofcourseourstaffinAuckland,who’vehadthe
mostsevererestrictionstoworkthrough.Fromabusinessperspective,wewereableto
rolloutourBusinessContinuityPlanwithminimaldisruption.Allstaffwereabletowork
fromhomeandcontinuetodeliverthehighlevelofworktheyalwaysdo.Nowage
subsidieswererequired,andwewereabletohelpourcustomerswithpromptresponses
andinformationmadeavailableonthetopic-alllearningsfromthelastlockdownthat
we’veadopted.Iwanttotakethisopportunitytosayahugethankyoutotheteamforall
your hard work and resilience over this time - it certainly isn’t easy.
Withourmorediversecustomerbase,moreofourcustomerswereimpactedbyCOVID.I
wasproudofhowquicklytheteamwasabletoreleaseaproductupdatetohelp
customersapplythewagesubsidycorrectlytotheirstaff.“Dogoodandbehonest”isone
ofourcorevaluesatPaySauce,soitwasgreattobeabletosupportourcustomerswhen
things were tough for our community.
AnotherwaywesupportourcommunityisthroughthePayrollGivingapp,wherewe
enableemployeestomakecharitabledonationsandweapplythetaxcreditatsource.We
hostover50charitiesonourPayrollGivingapp,andwecontinuetosupportover70
charitiesandnon-profitorganisationsoverthe2021year,byprovidingfreepayroll
services. We also proudly remain a living wage accredited employer.
Fortheyearended31March2021,weprocessedover$780Mofpayrollforourcustomers-
that'snotjustcalculatingthepay,wemadeallofthepaymentstobothemployeesand
theIRDaswell.Thisyear,weareontracktopassthe1Billiondollarmark-whichwillbe
anincrediblemilestoneforthecompanythathascomefromhumblebeginnings,
starting out as a two man band in a small windowless office in Lower Hutt.
Financials
Whilststillloss-makingoverall,thefinancialresultfortheyearendedMarch2021
improvedby$675konthepreviousyear.Theimprovementarosefrombothincreased
revenues and reduced expenses as the business continued to work towards profitability.
Startingwithexpenses,thesedeclinedslightlyfromjustover$4MinFY20tojustunder
$3.9MinFY21.Thereductionsinexpensessuchasprofessionalfees,administrativefees
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andfinancecostsrelateprimarilytothelistingandfinancingactivitiesthatoccurredin
FY20whichweren’trepeatedinFY21.ThelargestincreaseininvestmentinFY21hasbeen
intopeople.Thisincreaseincorporatesafullyearimpactofthecapability-investment
madeinFY20andtheadditionofafurther4FTEs.TheCOVID-19relatedtravelrestrictions
inplaceearlyinFY21alsoreducedourinvestmentintoin-personeventsandassociated
travel expenses.
Movingontorevenue,inFY21wesawanotherstrongyearofrevenuegrowthwithGAAP
reportedrevenueup24%.Breakingthatresultdownintoitscomponentparts,themain
sourcesofrevenueareProcessingFeesandInterestIncomeandupuntillastyearwealso
received a subsidy from the Inland Revenue for being a PAYE intermediary. As you can
seefromthegraph,processingfees-therevenuegenerateddirectlyfromcustomers-is
up59%YoY.Thegrowthinprocessingfeeshasremainedstrongacrossthelastthree
financialyears.TheIRDsubsidyceasedfrom1April2020andinterestincomeisdown16%
YoY predominantly due to the falling interest rate environment.
Thisgrowthinprocessingfeeswaslargelyaresultofa36%YoYincreaseincustomer
numbers,upto3,377asat31March2021.Aswellasattractingnewcustomerstothe
PaySauceplatform,we’vecontinuedtoaddvaluetoourexistingcustomersas
demonstrated by our low average monthly churn number of 0.88%.
AsaSaaScompany,akeymetricforPaySauceistheAnnualisedRecurringRevenue(or
ARR).Thisisthemostrecentmonth’srecurringrevenuemultipliedbytwelve.For
PaySauce,recurringrevenueincludesbothProcessingFeesreceiveddirectlyfrom
customersplustheinterestearnedoncustomerfundsheld.TheARRwasup31%forthe
yearto$2.4M.Again,breakingthatdownintothecomponentpartsshowsthattheARR
fromprocessingfeesaloneincreased43%,whereastherecurringinterestincome
componentdeclinedtolessthanhalfthatofFY20.Thiscauseda3%declineinthe
monthlyAverageRevenueperUser(ARPU)from$62to$60.The$2declinereflectsa$3
increase in processing fees and a $5 drop in interest income.
OtherkeySaaSmetricsarealsoimproving,particularlythosereflectingthelifetimevalue
ofourclients.Thetotallifetimevalueofourtotalcustomerbasehasmorethandoubled
overtheyearfrom$7.6Mto$15.5M.Thiscomesfromboththeincreaseincustomer
numbersandthe52%increaseinthelifetimevalueofeachcustomerfrom$3kto$4.6k.
ThisincreasedCustomerLifetimeValue(CLTV)hascomefrombothanimprovementin
theGrossMarginpercentageandadecreaseintherateofchurnfrom1.26%to0.88%ona
monthly basis.
We’vehadjustonefulltradingquartersincetheannualreportwasreleased,andthe
growthrateshavecontinued.RecurringrevenueforthequarterendedJune2021wasup
36%yearonyear-totalling$0.6M,andourcustomernumbersareup39%yearonyearto
atotalof3,933tocloseoutthequarter.Welookforwardtosharingthenextquarter's
resultswithyouassoonastheyareavailableinearlyOctober,withourinterimreportto
follow in November.
ENDS
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ABOUT PAYSAUCE
PaySauceisaSaaSfintechplatformprovidingsolutionsforpeopleatwork.Wegive
employersthetechnologytodigitallyonboard,payandmanageemployeesfromany
device.Ourplatformincludesrosters,mobiletimesheets,payrollcalculations,banking
integration,automatedpayments,PAYEfiling,labourcosting,automatedgeneralledger
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
24 September 2021
1

Introduction
Nick Lewis
Chair, Non-Executive Director
(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

Nicholas Lewis
Non-Executive Director
(Independent), Chair
Michael O’Donnell
Non-Executive Director
(Independent)
Board of Directors
Asantha Wijeyeratne
CEO & Co-Founder, Director
(Non-Independent)
Gavin Thompson
Non-Executive Director
(Non-Independent)
Jacqueline Cheyne
Non-Executive Director
(Independent), ARC Chair
4
VOTE

Executive Team
Asantha Wijeyeratne
CEO & Co-Founder
Troy Tarrant
CTO & Co-Founder
Jaime Monaghan
CFO
Mat Stokes
COO
5

Agenda
Chair’s Address
CEO’s Address
Financials
Resolutions
Other Business & Shareholder Questions
6

Chair’s Address
Nick Lewis
7

SmoothPay
Acquisition
Strengthened
team and
international
presence
Highlights for the year
Continued
growth
Strong
revenue and
customer
growth
PayNow

Delivered in
partnership
with BNZ
8
Rosters

Released new
app to fill
market gap

CEO’s Address
Asantha Wijeyeratne
9

Highlights
10
Rosters

Highlights
11
PayNow

Highlights
American Samoa
Australia
Cook Islands
Fiji
Kiribati
Nauru
New Zealand
Papua New Guinea
Samoa
Solomon Islands
Timor-Leste
Tonga
Vanuatu

12

Financials
Jaime Monaghan
Chief Financial Officer
13

Summarised Income Statement
Comprehensive IncomeFY21
$K
FY20
$K
YoY
$K
YoY
%
Processing Fees1,9281,210718 59%
Other Operating Revenue270565(294)(52%)
Total Operating Revenue2,1981,77542324%
Non-Operating Revenue-(93)93(100%)
Depreciation & Amortisation(261)(152)(109)(72%)
Employee Expenses(2,395)(1,781)(613)(34%)
Other expenses(1,197)(1,672)47528%
Finance costs(33)(440)41692%
Expenses(3,886)(4,045)1594%
Comprehensive loss for the period(1,688)(2,363)67529%
14

GAAP Revenue
for the year ended 31 March 2021
$1.775M
24%
$2.198M
15
Processing Fee Revenue
for the year ended 31 March 2021
$1.93M 59%

$0.922M
Increase in GAAP Revenue
from 31 March 2020
31%
69%
12%
88%

Customer Growth
as at 31 March 2021
2,492
36%
Increase from 31 March 2020
3,377
16
Churn
Customer churn % as at 31 March 2021
0.88%
(monthly)
10.56%
(annualised)

1,384

Annualised Recurring Revenue
as at 31 March 2021
ARR
Annualised recurring revenue as
at 31 March 2021
$2.4M

ARPU
Average revenue per user
(monthly) as at 31 March 2021
$60

17

SaaS Reporting Metrics (Non-GAAP)
SaaS MetricsFY21FY20YoYYoY %
Processing Fees ($K)1,9281,210718 59%
Interest Income ($K)168246(78)(32%)
Recurring Revenue ($K)2,0961,45664044%
Cost to Serve ($K)(681)(560)(121)(22%)
Gross Margin ($K)1,41589651958%
Gross Margin (%)68%62%6pps10%
18
CAC
as at 31 March 2021
$539 4%

Customer LTV
as at 31 March 2021
$4.6K 52%

Total Customer LTV
as at 31 March 2021
$15.5M 106%
LTV : CAC
8.5 : 1
45%

Quarterly Recurring Revenue Growth
to 30 June 2021
Increase due to
payday filing
requirement for
employers
36%
Year on year growth
for Q1 FY2022
19

Customer Growth
to 30 June 2021
39%
Year on year growth
for Q1 FY2022
20
Increase due to
payday filing
requirement for
employers

Resolutions
Nick Lewis
Non-Executive Director, Chair
(Independent)
21

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

FOR
AGAINST
ABSTAIN
22
Gavin Thompson
Non-Executive Director
(Non-Independent)

Resolution B
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
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 last calendar month of the reporting period.

ARR: Annual recurring revenue is the MRR, multiplied by 12.

ARPU (monthly): Average revenue per user (monthly) is the total recurring revenue for the month, divided by the total customers processing
payroll that month.

Churn: Churn is expressed as a percentage and is calculated as the number of customers who did not run a pay in the month, but ran at least one
pay in the previous month, divided by the total number of customers at the end of the previous month.

CAC per addition: Customer acquisition cost (per addition) is the total cost of acquiring customers for the period, divided by the number of new
customers processing payroll that were acquired during the period.

LTV: Lifetime value is the estimated value of a customer over its lifetime with PaySauce. This is calculated by taking the ARPU multiplied by the
gross margin %, then divided by the churn %.

Total Customer LTV: Total customer lifetime value is the lifetime value multiplied by the total customers.

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
26