2022 Annual Meeting Addresses and Presentation

Annual Shareholders Meeting
23 SEPTEMBER 2022

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Introduction
Shelley Ruha
Chair, Non-Executive Director
(Independent)

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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.

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Shelley Ruha
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
VOTE
VOTE

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

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

Shelley Ruha
Chair’s Address

Awesome
People

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Reinvest For Long
Term Growth
Strategic priorities
Win-Win-Win
Partnerships
Obsess Over
Customers

Asantha Wijeyeratne
CEO’s Address

Cash Positive
Positive
cashflow and
EBITDA in Q4
of FY22
10
Growth
83% YoY
Annualised
Recurring
Revenue (ARR)
Highlights for the year
PayNow
$3m earned
wages
accessed
Acquisition
1300
SmoothPay
customers
embedded

Jaime Monaghan
Financials

*before increase in funds due to customers and the IRD, collected in performing our role as a PAYE intermediary.
FY22 result summary
FY22 ($000s)FY21 ($000s)% change
Total recurring revenue3,3992,096 62% ￪
Gross margin2,3421,49565% ￪
Gross margin %69%68%1pp ￪
Loss before tax, depr & amort(881)(1,427)(38%) ￬
Net loss (GAAP)(1,282)(1,688)(24%) ￬
Cash receipts from customers3,0622,12144% ￪
Net operating cashflow*(666)(1,118)(40%) ￬

Progress to break-even
*FY22 Employee Share Scheme cost ($200k) excluded
Operational break-evenYear-on-year comparisons

SaaS customer journey
$352
Cost of acquiring
a customer (CAC)
$61
Revenue per
customer (monthly)
69%
Gross margin (revenue less
cost of servicing a customer)
10 years
How long will a customer stay
(based on implied Churn)
$5,022
Lifetime value of a
customer (LTV)

SaaS customer lifetime value
YoY improvements
Customers ↑ 79%
Churn ↓ .04 pp
Margin % ↑ 1 pp
ARPU ↑ 2%

Total Customer LTV
FY22
$30.4M
Total Customer LTV
FY21
$15.5M
↑ $14.9M
96% YoY
Driven by

●PaySauce processing fees
have grown at an accelerated
pace in the last four quarters
●Interest rates have returned
to pre-COVID levels and will
have an increasing impact on
overall ARR
●Price increases applied to the
acquired SmoothPay
business will take full effect
when all annual subscriptions
have renewed
Accelerating ARR growth rates

Annualised Recurring Revenue to June 2022
Annualised Recurring Revenue (ARR)

Resolutions

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FOR
AGAINST
ABSTAIN
Resolution A
That Shelley Ruha be elected as a
Director of PaySauce.

Shelley Ruha
Non-Executive Director
(Independent), Chair
VOTE

20
FOR
AGAINST
ABSTAIN
Resolution B
Having retired, that Asantha
Wijeyeratne be re-elected as a
Director of PaySauce.

Asantha Wijeyeratne
CEO & Co-Founder, Director
(Non-Independent)
VOTE

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FOR
AGAINST
ABSTAIN
Resolution C
That Directors can elect to receive
PaySauce Ordinary Shares in lieu of
Directors fees in accordance with
NZX Listing Rule 4.7.1

22
Resolution D
That the Board is authorised to fix
the fees and expenses of Grant
Thornton as the auditor of
PaySauce.
FOR
AGAINST
ABSTAIN

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

Thank you!

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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.

Gross margin: The gross margin, when discussed as a SaaS term, is the recurring revenue of the business, less the cost to serve
customers. This is often then expressed as a percentage, where the gross margin is divided by the recurring revenue.

Churn: Churn is expressed as a percentage calculated as the net reduction of customers in a calendar month divided by the total
customers at the start of that 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. Excludes inorganic growth through the acquisition of
SmoothPay 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

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2022 Annual Meeting Addresses
Lower Hutt, New Zealand - 23 September 2022
Chair’s Address
It’sbeenmyprivilegetojointhePaySauceboardthisyear,alandmarkyearforthebusiness.
AhugethankyoutoMikeO’Donnellforhisinsightsandenergyasinterimchairwhich
madeiteasytostepintotherole.I’mreallyexcitedtobepartofthePaySaucejourney.The
opportunitytojoinalocalfintechdeliveringworld-leadingsolutionswasaneasyoneto
accept.Forme,PaySauce’sobsessionwithobtainingadeepunderstandingoftheir
customershasreallyresonated.Thatfocus,combinedwithleveragingwin-win
partnerships,hasensuredthatalmosthalfofalldairyfarmersinAotearoawhoemploystaff
nowusethePaySaucesolution.AssumingResolutionAgoesmyway,I’mreallyexcited
about helping to drive the strategy that takes that local success global.
ThefocusonbuildingforscalehasbeentopofmindsinceIjoined.Ouraccelerated
quarter-on-quarterrevenuehaspoweredthenecessaryreinvestmenttodeliverfurther
organicandscalablegrowth.Italsoputsusinapositiontomakestrategicdecisionstoward
ensuring we become the first choice people platform for SMEs in Oceania.
Onthatnote,theSmoothPayacquisitionhasbeenanotablesuccess,withthecustomer
baseandtheexceptionaltalentweacquiredinthistransactiongivingusanentrypointto
leverageasweplanfornewgeographicmarkets.Wewillcontinuetoactivelyseek
acquisitiontargetswhereweseeagoodfitandpathtoacceleratedlongtermgrowth.We
willcontinuetoconsideroptionsforfinancinggrowthopportunities,includinggoingback
tothemarketforcapitalifwebelievetheopportunitycouldsignificantlyliftourgrowth
rate, be it acquisition, or growth from other means.
Awesomepeopleremainakeyfoundationofourstrategy,withourcultureenablingusto
attractandretaintalentinacompetitivemarket.PaySaucehasafun,freshanddiverse
workforcewholiveourvalues.ThiscreatesanenvironmentwherethePayForcecangrow
with the business.
IlookforwardtosupportingAsanthaandtheteamaswecontinueourjourneytoward
industryleadership.Thedeterminationandhardworkofthelastyear,despitea
backgroundofCOVIDinthecommunityandothereconomicuncertainties,sawustackle
many of the foundational challenges facing a company moving from startup to scale up.
Toourshareholders,onbehalfoftheentireboardofdirectorsIwouldliketothankyoufor
your trust during the year and look forward to your continued support.
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CEO’s Address
Thank you, Shelley.
AsShelleyhassaid,thisyearhasbeenalandmarkyearforPaySauce.We’vetaken
decisivestepstomovefromstart-uptoscale-upand,whiletheresulting83%YoY
growthinARRisdefinitelysomethingwe’reproudof,it'sendingthefinancialyearwith
acashflowpositivequarterthat’sthelandmarkmomentIwanttounderline.Wesaid
wewould-andwedid.We’veessentiallyprovedthatourpathwaytosuccessisnot
dependentonfurthercapitalinjections-therewardfortheexecutionofourstrategyis
theprivilegedpositionofbeinginchargeofourowndestiny.Theintentionremainsto
reinvestprofitsbackintothebusinesstofurtheracceleratethegrowth.Weseethisas
adding the greatest value back to the shareholders.
Talkingoflandmarks,fortheyearended31March2022,wepassedthe$1billion
milestone.That’sonebilliondollarsofpayrollprocessedinoneyear,takingustoover
$3.5 billion since we started.
Theemployeesearningthosewagesandsalariesarealsoourcustomers.Weprovide
themaservicetomaketheirliveseasier.Almost$3mofearnedwageshasnowbeen
accessedthroughourflagshipfeaturePayNowsinceinception.That’s$3mthatdidn’t
endupbeingprovidedbythirdtierorpredatorylenderstoourpeople.This
partnershipwithBNZcontinuestoinspireourteamandimpressourpartners.Much
moreimportantlythough,we’redoingourparttomakelifeeasierforbothemployers
andemployees.Aloteasieractually-weestimatewe’vesavedover$2.5minpayday
lending fees.
We’vecontinuedtoexpandinthedairysectorandfindourselves,aswespeak,
providingpayrollserviceforaroundhalfofemployingdairyfarmsinNewZealand.
Marketpenetrationofthismagnitudeisearlierthanwe’dplanned.Fourkeydriversof
this success include:
●
Customer led product evolution to solve real problems;
●
Passionate customer service expertise;
●
Enhanced brand awareness; and
●
Strategic industry and channel partnerships.
Thesedriversformtheplaybookwhichwewillrollouttonewverticalsandgeographies
to replicate the success at scale.
Partnershipsarevitaltoourcontinuedgrowth,andwe’vemadesomedeliberate
investmentsthisyear.AnalliancewiththeCharteredAccountantsAustralia&New
Zealandbroadensouraudienceandgivesweighttoournewlylaunchedpartner
programme, designed to certify, recognise and reward advisors.
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ThesuccessfulcompletionoftheSmoothPayacquisitionattheendofMaylastyearadded
over1,300customerstoourportfolioandexpandedourcustomerfootprintintothePacific
territoriesandAustralia.Ninepercentofourcustomerbaseisnowinternationaland8%of
recurringrevenuecomesfromprocessingfeesfromthisproductline.Thiswasachievedfor
a consideration of $0.375m of PaySauce ordinary shares, being a 1.5 x revenue multiplier.
Therehavebeenchallengesofcourse.Asasmallteamwe’revulnerabletoabsence
andwefeltthiskeenlywhenmanyofourfrontlinesupportteamwereillwithCovid
duringourmostbusytime-MayandJune.Duringthisperiod,the‘yearend’fordairy
farmers,wetypicallyhavecallvolumesthreetimesthenormallevel.So,despite
buildingouttheteamtoalargerheadcountthanlastyeartoensureseamlessservice,
weendedupwithfewercrewwhichwasstressfulforeveryone.I’mproudtosaythat
theteamreallypulledtogether.Alongsidemakingsureweliveourvaluesto‘dogood’
bycelebratingsuccessandnurturingourpeoplewecontinuetomakeinvestments
into software and systems to build resilience in the team and increase efficiency.
Insummary,yes,alandmarkyearthattickedofftwoofthegoalsI’vebeenso
passionateabout.Achievingpositivecashflowhasbeenournorthstarforsometime.
Theother,toleadaresilientandscalablebusinesswellpositionedtoexploitnew
opportunitiesisalsoareality.ThankyoutothePayForce,ourexecutiveteam,myBoard
and to all our shareholders for your support in making this our biggest year ever.
Financials
FY22wasastrongyear,cappedoffbyachievingoperationalbreak-evenandpositive
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cash flow for the last quarter of the year.
Recurringrevenuegrowthplayedasignificantpartinthis,growing62%YoY.Processing
fees were up 66% YoY, resulting from:
●
2,675 new customers onboarded during the year (up 79% YoY);
●
The impact of tactical pricing changes, implemented in November 2021; and
●
TheacquisitionofSmoothPayandthegoPayrollproduct-includedinthe
customer numbers above.
Wedeliveredthislevelofgrowthdespitekeepingthesamefulltimeequivalent(FTE)
headcount-growingourrevenueperFTEto$110kperFTE(up60%YoY).Peoplecosts
grewto$3.3m(up16%YoY),andweinvested$0.43m(13%ofpeoplecosts,and13%of
recurringrevenue)ofthisintoimprovingourexistingproductanddevelopingour
internalsystems.Sincethen,we’veincreasedtheinvestmentintoourpeople,systems
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Excludes FY22 Employee Share Scheme cost ($200k)
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andprocessesaswescaleouroperationstoensurethatwe’reabletokeepupwith
continued growth whilst operating efficiently and delighting our customers.
Wegrewrevenueandkeptexpensesflatoverthefourquarters,toachieveabreakeven
finalquarter.Intermsofrelativitiestothepreviousyear,therateofrevenuegrowthis
significantlyhigherthantherateofexpensegrowth.Operatingcostsincreased24%
YoYcomparedtoa60%increaseinoperatingrevenue-improvingourbottomlineby
$0.41m relative to last year, and reducing our net loss to $1.28m as a result.
WemanageeverystepoftheSaaScustomerjourney.Thecostofacquiringeachnew
customerpaidforitselfwithin6months.Weincurredaservicecosttomaintainthose
customers.Historically,customershavechurnedatjust8%peryear,meaningeach
customer should deliver $5k over their lifetime.
Thetotalcustomerlifetimevaluemultipliesthat$5kvaluepercustomertothetotal
customer number, being an estimate of the value of the total customer base.
Thelifetimevaluepercustomerincreased9%comparedtolastyearasaresultofthe
improvementsacrossChurn,ARPUandGrossmargin.Whencoupledwiththe79%
growth in customer numbers this year, the total customer lifetime value has doubled.
AsAsanthamentioned,ouracceleratedgrowthledtoan83%increaseinARR,drivenby
revenuefromourexistingprocessingfees,newlyacquiredprocessingfeesthroughthe
SmoothPay acquisition, and interest income being up across the board.
AsaPAYEintermediary,PaySauceearnsinterestonthefundsheldonbehalfof
customers-insimpletermsthecustomerfloat.Whilstthefloathasgrownconsistently,
therateofinterestrateriseshasbeenfarmoreaggressivewithinterestratesmorethan
doubling over the financial year, and increasing further still into the F23 financial year.
Thegrowinginterestrateenvironmentishavingapositiveimpactontoplinerevenue,
withinterestrevenuemakingup12%ofourrecurringrevenueforthequarterended30
June2022(comparedto7%inthequarteroryeartoMarch2022).Interestrevenuewas
up348%YoYasratesreturnedtotheirpre-COVIDlevels,andthefloatoffundsheldon
behalfofcustomersincreasedto$5.2mattheendofJune(up42%YoY).Thesefactors
haveallcontributedtoincreasingourannualisedrecurringrevenue(ARR)to$4.94mat
the end of June this year.
I’ll now pass you back to Shelley to run through the remainder of the meeting.
ENDS
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ABOUT PAYSAUCE
PaySauce is a SaaS fintech platform providing solutions for people at work in 14
jurisdictions across the Asia-Pacific region. We give employers the technology to
digitally onboard, pay and manage employees from any device. Our platform includes
rosters, mobile timesheets, payroll calculations, banking integration, automated
payments, 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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