PaySauce FY2024 Half Year Result and Interim Report
PaySaucerecordsmaidenpositiveearningsin
yearoftransition
LowerHutt,NewZealand-22November2023
PaySauce’sunauditedfinancialresultsforthesixmonthsto30September
2023
HIGHLIGHTS
●
FirstperiodofpositiveEBTDAof$255k,reversingthelossof$200kinthesix
1
monthstoSept2022
●
OperatingRevenueof$3.6m,up40%liftedbynewcustomergrowthand
higherinterestincome
●
AnnualisedRecurringRevenue(ARR)of$7.4mup32%onsixmonthstoSept
2022
●
Ruleof40scoreof48,aheadoftheindustrybenchmark,withearnings
improvementmakingapositivecontribution
●
PaySauceGen2.0PayrollEnginebeingbuiltandexecutedagreementfora
proofofconcepttoembedpayrollintotheirsoftware,potentiallyopeninga
newmarketforthecompany
EmploymentfintechPaySauce(NZX:PYS)announcestodaythatithasgenerated
maidenfirsthalfEarningsBeforeTaxDepreciationandAmortisation(EBTDA)asit
benefitsfromnewcustomergrowthandhigherinterestrevenue.
PaySauceExecutiveDirectorandCEOAsanthaWijeyeratnesaidtheachievementof
positiveearningswasakeymilestoneforthebusiness,especiallyinthecurrent
economicconditions.
“Gettingtoprofitabilityandconsistentlygeneratingpositivecashflowsiscriticalfor
PaySauceaswetransitionourbusinessforfuturegrowth.Forme,it'salwaysbeen
essentialthatPaySauceisincontrolofitsowndestiny,particularlyfromacash
perspective.
ThebackdropofrisinginterestrateshasbeenadoubleedgedswordforPaySauce.
WithhigherinterestratesincomeearnedonthefundsheldonbehalfofPaySauce’s
customersgrew,butthiswasoffsetbyfewernewcustomerstakinguptheproductas
smallbusinessesinourdomesticmarketfacegreaterheadwindsinservicingtheir
owndebt.PaySaucehascontinuedtogrownewcustomers,butatalowerratethanin
previousyears.
1
EarningsbeforeTax,DepreciationandAmortisation
“PaySaucehasbeenfocussedonthenextstageofgrowthandbuildingtheGen2.0
PayrollEnginewillallowustoscaleatafasterpaceinthefuture.Thisyearhasbeen
abouttransitioningourfuturegrowthstrategy,sowhilstwe’vecontinuedtogrowin
thecurrentfinancialyear,we’venotgoneforgrowthatallcosts,butratherprofitable
growthascashremainsakeydriverofourbusinessdecisions.Youcanseethat
comingthroughwhenbenchmarkingagainsttheruleof40,”Wijeyeratnesaid.
FinancialPerformance
SEP2023
$000s
SEP2022
$000s
YoY%
Operatingrevenue3,6082,57740%
Expenses(excl.tax,depreciationand
amortisation)
(3,353)(2,777)21%
EBTDA255(200)(127%)
Tax,depreciationandamortisation(522)(225)132%
Netlossfortheperiod(267)(425)(37%)
AkeyachievementoverthelastsixmonthshasbeentoadvancePaySauce’snewGen
2.0PayrollEngine,whichwillenablescalablegrowthinthefuturethroughtwokey
opportunities:
●
Embeddedpayroll;and
●
Micro-businesspayrollapp
Asannouncedearlierthismonth,PaySaucehasenteredanagreementwithathird
partytobuildaproofofconcept,demonstratinghowthePaySauceGen2.0Payroll
Enginecanbeembeddedintothethirdpartiessoftware,tocalculatepayroll,
completepaydayfilingwiththeIRDandmakeallpayrollrelatedpaymentsontheir
behalf.Themicro-businesspayrollappwillusethesametechnologytoenablea
fasterself-serviceappfornewcustomerstoeasilysignupandruntheirfirstpay
throughPaySauce.
CustomerMetricsSEP2023SEP2022YoY%
ActivePaySaucecustomersatendofperiod7,2026,6588%
Churn%(monthlyaverage)fortheperiod0.91%0.76%(20%)
ARPU(monthly)atendofperiod$85$7022%
CAC(peraddition)fortheperiod$508$37137%
LTVpercustomeratendofperiod$7,070$6,42410%
TotalcustomerLTVatendofperiod$50.9M$42.7M19%
LTV:CACratioatendofperiod14:117:118%
OUTLOOK
Asoursmallbusinesscustomersfacetheeconomicheadwindsofhigherinterest
ratesfollowingtherecenttighteningcycle,theirhiringandspendingdecisions
overthenexttwelvemonthsaremoreconservative.PaySaucewillcontinueto
focusonahealthybalanceofgrowthandearnings.
“Wewillcontinuetodiversifyourcustomerbasebyinvestingintomarketing
channelssupportingthehospitalityandconstructionindustriesaswellasseeking
newpotentialpartnersforembeddedpayrollatamoreholisticlevel,Wijeyeratne
said.
“Workwillalsocontinuetodelivertheproofoftheembeddedpayrollconcept,
lookingtohaveanembeddedsolutiondrivinganupliftinARRattheearliestpoint
intimeandweareveryexcitedaboutthepotentialforthisnewchanneltomarket”
Furtherdetailsonthecompany’sperformanceisincludedintheinterimreport
andinvestorpresentationreleasedtotheNZXtodayandalsoavailableonthe
company’sinvestorwebsitehttps://www.paysauce.com/investor/#/documents
PaySaucewillhostanInvestorandMediaconferencecallonWednesday,22
November2023todiscussthehalfyearresult.Theconferencecallisscheduledto
beginat10:00amNZDT.
Tojoin,pre-registeryourinterestatInvestor@paysauce.com,andjointhevirtual
meetingroomhere
APPENDICES
●
Appendix1-NZXTemplateforResultsAnnouncementtotheMarket
●
Appendix2-InterimReport
●
Appendix3-InvestorPresentation
NON-GAAPFINANCIALINFORMATION
Non-GAAP(GenerallyAcceptedAccountingPrinciples)financialinformationdoesnot
haveastandardisedmeaningprescribedbyGAAPandthereforemaynotbecomparable
tosimilarfinancialinformationpresentedbyotherentities.TheNon-GAAPinformation
includedinthisreleasehasnotbeenaudited,andisnotpreparedinaccordancewithNZ
IFRS.
ThemeasuresreportedbyPaySauceareusedbymanagementtomonitorthe
performanceofthecompanyandareusefultoinvestorstoassessperformance.
Non-GAAPmeasuresaredefinedandexplainedintheInterimReport.
ReleasedforandonbehalfofPaySaucebyJaimeMonaghan,ChiefFinancial
Officer.
ENDS
ABOUTPAYSAUCE
PaySauceisaSaaSfintechplatformprovidingsolutionsforpeopleatworkin14
jurisdictionsacrosstheAsia-Pacificregion.Thetechnologyenablessmall
employerstodigitallyonboard,payandmanageemployeesfromanydevice.The
platformincludesrosters,mobiletimesheets,payrollcalculations,banking
integration,automatedpayments,PAYEfiling,labourcosting,automatedgeneral
ledgerentriesanddigitalemploymentcontracts.ThePayNowfeatureenables
customers’employeestoaccessthepaythey’veearnedbeforepayday,providinga
freealternativetopaydaylenders.
www.paysauce.com
CONTACT
AsanthaWijeyeratne
CEOPaySauce
+6421554600
Pleasedirectanyinvestmentqueriestoinvestor@paysauce.com.
---
Resultsannouncement
(forEquitySecurityissuer/Equityand
DebtSecurityissuer)
UpdatedasatJune2023
Resultsforannouncementtothemarket
NameofissuerPaySauceLimited
ReportingPeriod6monthsto30September2023
PreviousReportingPeriod12monthsto31March2023
CurrencyNewZealandDollar
Amount(000s)Percentagechange
Revenuefromcontinuing
operations
$3,608Revenueup40%
TotalRevenue$3,608Revenueup40%
Netprofit/(loss)fromcontinuing
operations
($267)Lossdown37%
Totalnetprofit/(loss)($267)Lossdown37%
Interim/FinalDividend
AmountperQuotedEquity
Security
Itisnotproposedtopaydividends
ImputedamountperQuoted
EquitySecurity
Notapplicable
RecordDateNotapplicable
DividendPaymentDateNotapplicable
CurrentperiodPriorcomparableperiod
NettangibleassetsperQuoted
EquitySecurity
($0.00519405)($0.00441609)
Abriefexplanationofanyofthe
figuresabovenecessaryto
enablethefigurestobe
understood
PaySauceLimitedhasnooperationalactivity,andasaresultthis
announcementisbasedontheconsolidatedoperationsofits
whollyownedactivePaySauceOperationsLimited,PaySauce
PTYLtdandRightRemunerationsLimited(together,‘theGroup’
or‘PaySauce’).Pleaserefertothecommentsabove,andthe
InterimReportandFinancialStatements.
Authorityforthisannouncement
Nameofpersonauthorisedto
makethisannouncement
JaimeMonaghan
Contactpersonforthis
announcement
JaimeMonaghan
Contactphonenumber+64225246366
Contactemailaddressinvestor@paysauce.com
DateofreleasethroughMAP22November2023
Unauditedfinancialstatementsaccompanythisannouncement.
---
1
2024
Interim
Report
2024
2023
23
Content
04 / Strategic plan and highlights
06 / Leadership
10 / Delivering on the plan
14 / Performance (SaaS metrics)
20 / Finances
37 / Directory
20232022202120241/2
2023
1/2
2022
1/2
2021
The Gen 2.0 Payroll Engine is nearly
here. PaySauce is working with its
first customer to prove we can plug
the Gen 2.0 Payroll Engine into their
employment solution to embed payroll
into their service. The Gen 2.0 Payroll
Engine will also power our micro-
business payroll app.
The opportunities are endless
and we’re excited about the early
demand shown for this new modular
architecture.
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Gen 2.0 Payroll
Engine Rev
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
Embedded
Payroll
Micro-business
App
A
P
I
PaySauce
Gen 2.0
Engine
A
P
I
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
4−6 months
sales and
implementation
TIME TO
SALE
Download the app
and pay staff the
same day
TIME TO
SALE
Serve new
customer base
following
implementation
SALES
CYCLE
Support
Accounting and
Direct marketing
channels
SALES
CYCLE
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
45
The highlights
• Building the Gen 2.0 Payroll
Engine
• Building a proof of concept for
embedded payroll
• Building a micro-business
payroll application
• Improved security
• Further invested in the Accountant
channel
• Working with first potential
embedded partner
• Evolved the payments solutions in
NZ with Akahu and ASB
• Continued to grow, but at a
declining rate of growth
• Commenced marketing to new
verticals
• Strong customer advocacy
maintained
• Customer centric design for new
micro business payroll app
• Added sales and marketing
capability
• Re-allocated headcount for
strategic alignment
• Attracted specialist people for
specialist functions
• Created an Employee Share
Scheme for F24
3 year strategic plan -
where we’re heading
Strategic prioritiesHow we’re tracking for FY 2024
Our values
1.
Reinvest for
long term
growth
Fun and
f resh
Resourceful
and results-
orientated
Simple and
smart
2.
Obsess over
customers
3.
Win-win-win
partnerships
4.
Awesome
people
Do good and
be honest
Respect and
include
Annualised Recurring
Revenue (ARR)
32% YoY increase
EBTDA
$455k YoY increase
Cashflow
Generating cash flow
f rom operations*
Our role
The straight up
provider of effortless
solutions for people
at work
The first choice
people platform for
SMEs in globally
Our vision
30 SEP
2023
30 SEP
2023
30 SEP
2023
30 SEP
2023
1 APR
2023
1 APR
2023
1 APR
2023
1 APR
2023
31 MAR
2024
31 MAR
2024
31 MAR
2024
31 MAR
2024
$
255
k
$
7.4
m
$
464
k
48
Rule of 40
Above industry
benchmark
Ahead of target
Ahead of target
On target
Behind target
* before funds due to customers and IRD
67
Dear shareholders,
It’s an exciting time for PaySauce, with the achievement
of maiden positive earnings in the first six months of the
new financial year. This has been a key milestone and
reflects the period of transition for PaySauce. Amid
challenging trading conditions, when customer growth
in the core New Zealand business has slowed, we have
evolved our payroll technology to enable scalable future
growth. We have developed an advanced Gen 2.0
Payroll Engine that is unbundled from the user interface,
a move that opens new and significant opportunities for
growth.
We are now moving to an environment where third party
employee service providers can embed the Gen 2.0
Payroll Engine into their solutions. And, at the same time,
we can continue to tap the significant opportunities we
see across Australasia to deploy the bundled solution in
our mobile micro-business payroll app.
Financial performance
Operating revenue for the six months to the end of
September rose 40% to $3.6 million from $2.6 million in
the same period in the prior year. Annualised Recurring
Revenue (ARR) at the end of September rose to $7.4
million, a 32% increase on the $5.6 million the same time
a year ago.
The result was supported by the strong rise in interest
rates, which led to an 162% rise in income from interest
payments held on account for our customers and the
IRD to $1.0 million from $390,000 in the prior year.
Processing fee income rose by 18% to $2.5 million from
$2.1 million, an increase driven by both new customers
and increased revenue from existing customers.
However, these gains have been moderated by a
slowdown in customer growth as penetration in the core
dairy farm vertical matures. Growth into the new verticals
of plumbers, builders and hospitality has started, but
remains in its infancy.
Customers at the end of September stood at 7,202 up
8% on the 6,658 at the same time year ago, but the rate
of growth was down from the annualised rate of 14% at
the end of March 2023.
EBTDA was $255,000 reversing the prior year’s EBTDA
loss of $200,000 with growth in revenue outpacing
costs. Notably, we held the costs to serve existing
customers steady at $21 per customer. This achievement
has been offset by a 37% rise in new customer
acquisition costs to $508 per customer from $371 per
customer and continued investments for growth. Net
losses after tax narrowed to $267,000 from $425,000
at the same time a year ago.
Our key business metric (our revenue growth rate
+ our EBITDA margin) is at 48, above the ‘rule of 40’
benchmark of SaaS companies, albeit below the 67 we
achieved in the year to the end of March 2023.
The company is self-funding. Operating cashflows,
before the inflow of funds due to customers and the
IRD, were $464,000, a significant improvement over the
cash outflow of $88,000 in the prior year. The company
meanwhile has undrawn facilities of $250,000.
Outlook
We are confident about our prospects for the year
ahead and beyond. The current high-interest rate
environment, which appears set to persist for some
time, represents a double-edge sword for PaySauce.
On the one hand it is supportive of revenue as we earn
more on the funds we hold on behalf of customers
and the IRD. However, we also recognise that it makes
trading for our customers challenging and makes it
more difficult for PaySauce to recruit new customers,
especially as we seek to grow our micro-business
payroll app into new verticals and establish a foothold in
Australia.
Against this, we are excited about the opportunities
presented with the advances of the Gen 2.0 Payroll
Engine and our embedded payroll solution. We believe
these developments combined with existing Australasia
opportunities are bringing our goal of $10 million in ARR
into sight.
We thank the PaySauce team for their dedication over
the last six months and look forward to providing an
update for shareholders in the New Year.
Yours sncerely,
Shelley Ruha
Independent Director, Chair
MESSAGE FROM THE CHAIR
Shelley Ruha
Independent Director,
Chair
Maiden positive earnings
in year of transition
EBTDA (earnings before tax, depreciation and amortisation) is a non-GAAP financial measure that is defined on page 19 of this report.
“
“
The evolution of our payroll technology...
opens new, significant and international
opportunities for growth.
32
%
Annualised
Recurring
Revenue (ARR)
$7.4m
$8m
$4m
$6m
$2m
MAR 23SEP 23SEP 22MAR 22SEP 21MAR 21SEP 20
InterestProcessing fees
89
Looking ahead, we have some economic headwinds
as our customers adjust to the higher interest rates
following the recent tightening cycle. Our dairy
customers are also facing a relatively low payout, which
will also impact their hiring and spending decisions over
the next twelve months. We will continue to diversify
our portfolio by investing into marketing channels
supporting the hospitality and construction industries
as well as seeking new potential partners for embedded
payroll at a more holistic level. Work will continue to
deliver the proof of the embedded payroll concept,
looking to have an embedded solution driving an uplift
in ARR at the earliest point in time. Its a phenomenally
exciting time to be on this journey and I’m glad we’ve got
your support along the way. Thank you again, for your
support of PaySauce.
On behalf of shareholders and the board we thank the
team for their efforts.
Yours sincerely,
Asantha Wijeyeratne
Executive Director, CEO and Co-Founder
Dear shareholders,
November was a watershed month for PaySauce. An
agreement to deliver a proof of concept to embed our
payroll technology within a third-party employment
solution, as Shelley noted, holds out the potential for
significant new growth opportunities.
At the heart of this agreement is the successful
evolution of our technology in a way that differentiates
PaySauce from other Software as a Service (SaaS)
payroll solutions in two critical ways.
Firstly our new Gen 2.0 Payroll Engine has been
developed to be configured quickly to comply with
complex payroll rules in any jurisdiction around the
world. Secondly, it can be unbundled from the user
interface, offering an application programming
interface (API) that allows third parties to quickly
integrate it with their systems. It is also designed for
superior speed and processing.
As a result of this evolution we can continue to tap the
significant opportunities we see in Australasia for a
robust mobile solution for micro-businesses, while at
the same time target a new category of customers –
employee service providers.
A multi-national opportunity
The second category of these customers is a truly
international opportunity. Employee service providers
around the world are rapidly consolidating. With that
move, demand is growing for payroll solutions that can
be quickly deployed in multiple territories. Our Gen 2.0
Payroll Engine meets that need.
For PaySauce the new market offers complementary
characteristics to the existing market for the mobile app.
New contracts can deliver an immediate and significant
uplift in ARR with pricing set at rates per pay slip and
agreements set with contracted minimum volumes.
Contract periods are expected to be fixed term over
multiple years and where the service is offered in New
Zealand, PaySauce will continue to earn interest on
balances held on behalf of clients. Meanwhile, the
cost to serve customers is expected to be lower since
the employee service provider owns the customer
relationship.
Against this there is a longer sales cycle than the mobile
app. Additionally, there are development costs as
PaySauce is contracted to deliver the integration of the
Gen 2.0 Payroll Engine and maintain ongoing Service
Level Agreements (SLAs).
Our initial proof-of-concept agreement, with a
counterparty that has requested anonymity, is aimed at
demonstrating that the re-architecture of PaySauce’s
technology can lead to greater scalability. This contract
alone, should it deliver on its objectives, could deliver a
significant increase in ARR.
Meanwhile, expressions of interest from other employee
service providers since our announcement of this new
capability, has been strong and we are confident of
quickly offering the solution to similar service providers.
Strategic delivery
The November agreements are also the culmination
of strategies focused on investing to deliver a secure,
robust and scalable platform to support long term
growth. They are also a product of our strategic focus on
fostering winning partnerships.
We meanwhile continue to obsess over customers in
line with our third strategic pillar. Our monthly churn rate
has risen slightly to 0.91% from 0.76% at the same time
a year ago.
Customer lifetime value increased 10% to $7,070,
principally reflecting a 20% increase in monthly recurring
revenue per customer, offset by the increase in monthly
average churn which causes a reduction to the derived
customer lifetime.
We are encouraged with these results, especially since
we increased prices on our standard and premium plans
last year. We continue to attribute this success to a
mobile app that is easy to use and the determination of
our amazing people, again a vindication of our strategy
to prioritise the recruitment and retention of great
people.
Outlook
Capital markets are tough at the moment and raising
funds, particularly for small market cap businesses, can
result in a substantial dilution for existing shareholders.
It has always been essential therefore, that PaySauce
achieves profitability and continues to generate positive
cash flows in order to control our own destiny.
Yet again surpassing the ‘rule of 40’ shows that we have
our investments into future growth and our current cash
flows in the right balance, something of which I’m hugely
proud. This balance has been crucial in allowing us to
evolve PaySauce, and take the initiative towards future
growth opportunities and our goal of serving 1 million
micro businesses globally.
MESSAGE FROM THE CEO
“
“
Expressions of interest f rom other service
providers since our announcement of this
new capability... has been strong.
Advancing
our strategy
Asantha Wijeyeratne
CEO, Co-founder
1011
1. Embedded payroll allows third parties to integrate
payroll calculations, staff payments and local
tax office filing into their own solutions. For
PaySauce, this enables an accelerated uptake for
end users as the customers are already clients of
the third parties. Existing employment solutions
are looking to consolidate internationally and
seek opportunities to expand their offerings to
incorporate payroll.
2. Micro-business payroll app is the end-user mobile
phone app that PaySauce will build and market to
businesses employing 1-5 employees. The app will
allow these businesses to onboard, manage, make
payments and file tax records for their staff from
their phone.
With one third party formally engaged and providing
requirements for the proof of concept for the
embedded solution in New Zealand, this opportunity is
beginning to come to fruition.
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Gen 2.0 Payroll
Engine Rev
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
Embedded
Payroll
Micro-business
App
A
P
I
PaySauce
Gen 2.0
Engine
A
P
I
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
4−6 months
sales and
implementation
TIME TO
SALE
Download the app
and pay staff the
same day
TIME TO
SALE
Serve new
customer base
following
implementation
SALES
CYCLE
Support
Accounting and
Direct marketing
channels
SALES
CYCLE
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Gen 2.0 Payroll
Engine Rev
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
Embedded
Payroll
Micro-business
App
A
P
I
PaySauce
Gen 2.0
Engine
A
P
I
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
4−6 months
sales and
implementation
TIME TO
SALE
Download the app
and pay staff the
same day
TIME TO
SALE
Serve new
customer base
following
implementation
SALES
CYCLE
Support
Accounting and
Direct marketing
channels
SALES
CYCLE
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Gen 2.0 Payroll
Engine Rev
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
Embedded
Payroll
Micro-business
App
A
P
I
PaySauce
Gen 2.0
Engine
A
P
I
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
4−6 months
sales and
implementation
TIME TO
SALE
Download the app
and pay staff the
same day
TIME TO
SALE
Serve new
customer base
following
implementation
SALES
CYCLE
Support
Accounting and
Direct marketing
channels
SALES
CYCLE
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
DELIVERING ON THE PLAN
The Gen 2.0 Payroll Engine is a step-
change in the architectural evolution
for PaySauce. The architecture is more
modular, enabling different components
to be pieced together to deliver an
awesome payroll experience for different
end users.
The two primary opportunities to
commercialise the Gen 2.0 Payroll Engine
are for Embedded payroll and the Micro-
business payroll app.
PaySauce
Gen 2.0 Payroll
Engine
1213
DELIVERING ON THE PLAN
Re-invest for long
term growth
Obsess over
customers
Win-win-win
partnerships
Awesome
people
Highlights
Embedded payroll opportunity
Micro business payroll opportunity
Enhanced infrastructure and security
Highlights
Accelerated development of Gen 2.0
payroll engine
Product improvements reduced
customer support calls
PayNow saved customers an estimated
$1.1m in interest and fees
Highlights
Strengthened banking connections
through API and Akahu
Increasing our reach into local
accounting firms
National brand exposure through rugby
sponsorships
Highlights
Four new senior roles in Sales and
Product teams
New employee share scheme for FY24
Winner of the 2degrees Wellington
Regional Business Excellence Awards
STRATEGIC PRIORITY #2
STRATEGIC PRIORITY #3
STRATEGIC PRIORITY #4
STRATEGIC PRIORITY #1
Long-term growth for PaySauce extends from the Gen
2.0 Payroll Engine, and the effort to bring that to the
market has dominated the first half of this financial year.
The Gen 2.0 Payroll Engine will enable new customers
to join PaySauce in a scalable manner, either through
new partners embedding the solution into their
own employment software, or through new micro-
businesses downloading the app to easily on-board,
manage, make payments and file tax records for their
staff.
Whilst the Gen 2.0 Payroll Engine is aimed at serving
customers in the future, investment also continues to
ensure PaySauce continues to attract new customers to
the existing PaySauce platform. That customer base has
continued to grow and there is a squad of developers
dedicated to improving the existing platform to ensure
that our customers continue to receive improved
usability of the product, giving them increased peace of
mind and time back to run their respective businesses.
The understanding of our customers is critical to our
short, medium and long term success, ensuring that we
give them the peace of mind that their employees get
paid correctly, on time and with all relevant compliance
filing completed. With the technological enhancement
offered by our Gen 2.0 Payroll engine, the view of the
customer is evolving.
Our micro-business payroll app is focused entirely
on making the lives of business owners who employ
1-5 employees much, much easier. Essentially, to
those customers, we’re selling peace of mind and
time. Whilst we’re still at the beginning of the journey,
we’re thinking about the customer for embedded
payroll very differently, as these customers shall likely
be aggregators of many employers with their own
employees, and the end-customer relationship is likely
to be owned by the aggregator.
To scale quickly and efficiently, especially when scaling
globally, it’s essential to partner with local experts
who’ve already solved the problem in their own market.
PaySauce partners with many different organisations as
long as the partnership results in a win for PaySauce, a
win for the partner and ultimately a win for our customer.
Working with our banking and payments partners
PaySauce has implemented technology upgrades that
reduce processing complexity, while giving customers
greater security, real-time visibility of their payroll
payments, and eliminates the need for letters of credit.
Attracting and retaining awesome people is essential
to PaySauce’s strategic execution. In this period,
the evolution of the existing platform has enabled
customers to self-serve to a greater extent. This has
reduced the number of Customer Support people
required to ensure those customers get an awesome
experience with PaySauce. The increased capacity has
been moved into areas to support our future growth,
predominantly the Sales and Product teams.
The collective efforts of the team were recognised
at the 2023 2degrees Wellington Regional Business
Excellence Awards. Judged on a number of criteria,
including strategic planning, internal communications,
performance monitoring, training support, and diversity
and inclusion, PaySauce was recognised as the winner
in the Service and Support business category, and was
the overall Supreme Winner.
1415
PERFORMANCE flSAAS METRICSfi
SEP
CAC
$
508
ARPU
$
85
PaySauce SaaS
performance
*The business results and SaaS metrics reported in the following sections provide an overview of the performance of the business in a
format that we believe is useful for readers to assess the performance of PaySauce as a SaaS business.
Non-Generally Accepted Accounting Principles (Non-GAAP) measures have been included and should not be viewed in isolation, nor
considered as substitutes for measures repor ted in accordance with New Zealand Equivalents to International Financial Repor ting
Standards (NZ IFRS).
We use SaaS metrics to measure each stage
of the customer’s journey - the path to
Total Customer Lifetime Value. Metrics are
explained further in the following sections.
1415
PERFORMANCE (SAAS METRICS)
At 30 September 2023
Total Customer
Lifetime Value
$
50.9m
19
% YOY
New customer joins
PaySauce
Customer Acquisition
(CAC)
$508 per customer
Customer pays a
monthly subscription
Recurring Revenue
(Monthly): $85per
customer
Customer Lifetime
Value (CLTV)
$7,070 per customer
Customer receives
support
Cost to Serve (CTS)
(Monthly): $21 per
customer
+37%
YOY
+ 22%
YOY
CTS
$
21
Customer
Lifetime
9.2
yrs
CLTV
$
7,070
CLTV : CAC
14:1
0%
YOY
-20%
YOY
10%
YOY
-17%
YOY
Customer stays with
PaySauce
Customer Lifetime
Average monthly churn
of 0.91%
“PaySauce is easy to use,
saves me time... oh, and the
customer support is amazing”
Craig Turner
Espresso Repair Specialists
1617
PERFORMANCE flSAAS METRICSfi
Customer Acquisition
(CAC)
Recurring Revenue
SEP 2023SEP 2022YOY Change
Customer acquisition costs ($000s)
418348
20%
New customers (organic)
822939
(12%)
CAC per addition
508371
37%
SEP 2023SEP 2022YOY Change
ARR at end of period ($000s)
7,3785.576
32%
Recurring revenue for the period - Total ($000s)
3,5512,525
41%
ARPU (monthly) at end of period ($)
8570
22%
FTEs
4338
13%
Revenue per FTE ($000s)
8468
24%
How and why do we monitor customer acquisition?
PaySauce monitors the cost of acquiring new customers as an
efficiency metric. The customer acquisition cost (CAC) divides
the total cost of acquisition across the new customers for the
period. Customer acquisition is more efficient the lower the
CAC per new customer metric.
How and why do we monitor cost to serve? PaySauce
monitors the cost of servicing customers as an efficiency
metric. The cost to serve per customer (CTS) divides the total
cost to serve by the total number of customers for the period.
The lower the CTS, the more efficient PaySauce is at servicing
customers.
How and why do we monitor recurring revenue? PaySauce
monitors the revenue received from customers as a growth
metric. Looking at it from a customer journey angle, this is the
Average Revenue per User (ARPU) and is derived by dividing
the total recurring revenue by the number of customers in a
period. PaySauce measures this metric on a monthly basis - the
higher the ARPU, the more value received from each customer.
How and why do we monitor customer lifetime? PaySauce
monitors the retention of customers. This is measured
using the churn metric which calculates the percentage of
customers that stop using PaySauce products each month.
The lower the churn rate, the higher the derived lifetime of
each customer and the more value generated from them. The
customer lifetime value is assessed relative to the customer
acquisition cost (CAC) to determine the return on investment
of acquiring new customers.
Note - Customer LTV is particularly sensitive to churn and
assumes these levels will remain consistent over an extended
future period. Using the average churn levels for the last three
years (0.83%), total customer LTV would be $5.27m (10.4%)
lower.
SEP
Cost to Serve (CTS)
Customer Lifetime
SEP 2023SEP 2022YOY Change
Recurring revenue ($000s)
3,5512,525
41%
Less cost to serve ($000s)
(873)(759)
15%
Gross margin ($000s)2,6781,76652%
Gross margin %
75%70%
5pp
CTS per customer (monthly) at end of period ($)
2121
-
SEP 2023SEP 2022YOY Change
Customers at end of period
7,2026,658
8%
Average monthly churn rate for the period (%)
0.910.76
20%
LTV per customer at end of period ($)
7,0706,424
10%
Total customer LTV at end of period ($000s)
50,91842,770
19%
LTV:CAC ratio at end of period
14 : 117 : 1
(20%)
1819
PERFORMANCE flSAAS METRICSfi
SaaS P&L
SEP 2023SEP 2022
$000s$000s
Processing Fees
2,5362,142
Interest Income
1,015383
Recurring Revenue3,5512,525
Cost to Serve
(873)(759)
Gross Margin2,6781,766
Gross Margin %75%70%
Other Interest Income
67
Other Revenue
5145
Total Other Revenue5752
Customer Acquisition
(418)(348)
Research & Development
(501)(480)
General & Administration
(1,512)(1,169)
Interest Expense
(49)(21)
Earnings Before Tax, Depreciation and Amortisation 255(200)
Earnings Before Tax, Depreciation and Amortisation Margin %7%(8%)
Depreciation & Amortisation
(305)(235)
Asset Impairment
(228)-
Income Tax1110
Net Loss for the period(267)(425)
For the year ended 30 September 2023
Definitions
Customer acquisition costs
relate to acquiring and
onboarding new customers.
These consist of sales and
marketing people costs and
expenses such as digital
marketing, events and
sponsorship. These costs are
expensed as incurred as they
do not relate to any specific
customer or contract for
services.
Recurring revenue is
revenue that is expected
to repeat into the future.
Recurring revenue for
PaySauce consists of:
Processing Fees
- the monthly or annual
subscription customers
pay for PaySauce payroll
products.
Interest Income - interest
earned from funds held
on behalf of PaySauce
customers. As interest
earned on these funds grows
directly in relation to the
number of customers, this
is considered an additional
recurring revenue stream.
Annualised recurring
revenue (ARR) multiples the
recurring revenue generated
in the last month of the
period by 12 to annualise the
current recurring revenue.
Cost to serve consists of
customer support costs
and expenses such as cloud
hosting, maintenance of our
software products, and bank
fees charged per customer
transaction.
Gross margin represents our
recurring revenue less the
cost to serve our customers,
and is also often expressed
as a percentage, where the
gross margin is divided by
the recurring revenue.
Monthly average churn
rate is the 12 month average
of the net reduction of
customers in a calendar
month. This is expressed as
the percentage of the total
customers at the start of
that month. The estimated
customer lifetime (in months)
is derived using the inverse
of monthly average churn
rate (being 1 divided by the
monthly average churn rate).
Customer lifetime value
(LTV) is a measure of the
gross margin each customer
brings in over the time
they use PaySauce. LTV is
calculated by multiplying the
gross margin per customer
by the estimated customer
lifetime.
Total customer LTV is a
measure of the estimated
value of the current
customer base, assuming
that churn, revenue and cost
to serve remain constant.
This measure is calculated
by multiplying customer
LTV by the total number of
customers.
LTV : CAC is a measure of
the return on investment of
acquiring a new PaySauce
customer. This measure is
calculated by dividing the
customer LTV by the CAC per
addition.
Earnings Before Tax,
Depreciation and
Amortisation (EBTDA) is
calculated by adding back
depreciation, amortisation
and income tax expense
to the amounts reported in
the NZ IFRS-based financial
statements. PaySauce
believes that this measure
provides useful insights to
measure the performance
of PaySauce as a SaaS
business.
EBTDA Margin % is EBTDA
as a percentage of recurring
revenue and is calculated by
dividing EBTDA by recurring
revenue
2021
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
Interim Condensed
Consolidated
Financial Statements
For the six months ended 30 September 2023
Interim Condensed Consolidated Financial Statements
Interim Condensed Consolidated Statement of Profit or Loss and
Comprehensive Income
Interim Condensed Consolidated Statement of Financial Position
Interim Condensed Consolidated Statement of Changes in Equity
Interim Condensed Consolidated Statement of Cash Flows
Notes to the Interim Condensed Consolidated Financial Statements
Company Directory
20
21
22
24
25
26
37
/
/
/
/
/
/
/
Interim Condensed Consolidated Statement
of Profit or Loss and Other Comprehensive
Income
For the six months ended 30 September 2023
6 months to
SEP 2023
6 months to
SEP 2022
UnauditedUnaudited
NOTES
$000s$000s
Operating revenue 83,6082,577
Expenses
Employee expenses
9(2,288)(1,760)
Other expenses
12(1,016)(996)
Depreciation and amortisation
4,5(305)(235)
Asset impairments and disposals5(228)-
Finance costs
11
(49)(21)
Total expenses
(3,886)(3,012)
Net loss before income tax
(278)(435)
Tax benefit
1110
Net loss for the period
(267)(425)
Other comprehensive income
--
Total comprehensive loss for the period
(267)(425)
Loss per share
CentsCents
Basic loss per share7(0.19)(0.31)
Diluted loss per share7(0.19)(0.31)
The above statement should be read in conjunction with the accompanying notes.
2223
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
Interim Condensed Consolidated Statement
of Financial Position
As at 30 September 2023
SEP 2023MAR 2023
UnauditedAudited
Notes$000s$000s
Assets
Current assets
Cash and cash equivalents16356504
Cash and cash equivalents - customer funds1610,5818,169
Term deposits - customer funds1621,10024,200
Trade receivables
98124
Other assets
515638
Total current assets 32,65033,635
Non-current assets
Property, plant and equipment4351358
Intangible assets
5
2,0392,009
Total non-current assets 2,3902,367
Total assets 35,04036,002
Liabilities
Current liabilities
Trade and other payables326627
Funds due to customers and IRD
1631,68132,369
Employee benefits
488372
Other liabilities
350346
Lease liabilities69114
Total current liabilities 32,91433,828
The above statement should be read in conjunction with the accompanying notes.
Interim Condensed Consolidated Statement
of Financial Position (cont.)
As at 30 September 2023
SEP 2023MAR 2023
UnauditedAudited
Notes
$000s$000s
Non-current liabilities
Lease liabilities142115
Employee benefits2014
Interest bearing liabilities650650
Total non-current liabilities 812779
Total liabilities 33,72634,607
Net assets 1,3141,395
Equity
Share capital613,30313,212
Reserves15337242
Accumulated losses (12,326)(12,059)
Equity attributable to the owners of the Company 1,3141,395
The above statement should be read in conjunction with the accompanying notes.
For and on behalf of the Board of Directors, who authorised the issue of these Interim Condensed Consolidated Financial
Statements on 21st November 2023:
Shelley Ruha Jim Sybertsma
Chair Chair of Audit & Risk Committee
21 November 2023 21 November 2023
2425
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
Interim Condensed Consolidated Statement
of Changes in Equity
For the six months ended 30 September 2023
Attributable to equity holders of the Company
Share-based
payment reserve
Share CapitalAccumulated
lossesTo t a l
Notes
$000s$000s$000s$000s
Unaudited
Balance as at 1 April 2023 24213,212(12,059)1,395
Comprehensive loss
Net loss for the period--(267)(267)
Other comprehensive income----
Total comprehensive loss--(267)(267)
Transactions with owners
Share-based payments, net of tax15189--189
Share-based payments, paid up6(94)91-(3)
Total transactions with owners9591-186
Balance as at 30 September 202333713,303(12,326)1,314
Unaudited
Balance as at 1 April 2022 13113,039(11,502)1,668
Comprehensive loss
Net loss for the period--(425)(425)
Other comprehensive income----
Total comprehensive loss--(425)(425)
Transactions with owners
Share-based payments, net of tax
119--119
Share-based payments paid up6(78)74-(4)
Total transactions with owners4174-115
Balance as at 30 September 202217213,113(11,927)1,358
The above statement should be read in conjunction with the accompanying notes.
Interim Condensed Consolidated Statement
of Cash Flows
For the six months ended 30 September 2023
6 months to
SEP 2023
6 months to
SEP 2022
UnauditedUnaudited
Notes
$000s$000s
Cash flows from / (used in) operating activities
Receipts from customers2,4462,030
Interest received1,026268
Payments to suppliers and employees(2,997)(2,384)
Interest paid
(11)(2)
Net cash from / (used in) operating activities before before
changes in funds due to customers and IRD
464(88)
Increase / (decrease) in funds due to customers and IRD
(689)1,860
Net cash from / (used in) operating activities14(225)1,772
Cash flows from / (used in) investing activities
Funds on deposit3,100(7,295)
Investment in intangible assets(467)(448)
Purchases of property, plant and equipment (49)(46)
Net cash from investing activities 2,584(7,789)
Cash flows from / (used in) financing activities
Loan advances-650
Repayments of principal portion of lease liability (57)(32)
Repayments of other borrowings
(38)(19)
Net cash from / (used in) financing activities (95)599
Net increase in cash and cash equivalents 2,264(5,418)
Cash and cash equivalents at beginning of the period
8,67310,205
Cash and cash equivalents at end of the period10,9374,787
The above statement should be read in conjunction with the accompanying notes.
2627
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
Notes to the Interim Condensed
Consolidated Financial Statements
For the six months ended 30 September 2023
1. General information
PaySauce Limited (the “Company” or “PaySauce”), is a for-profit limited liability company, domiciled and incorporated in
New Zealand and registered under the Companies Act 1993. The company is an FMC Reporting Entity for the purpose of
the Financial Markets Conduct Act 2013. PaySauce is listed on the New Zealand Stock Exchange (“NZX”) that trades under
the ticker PYS.
The Group provides Software as a Service (SaaS) solutions for people at work in 14 jurisdictions across the Asia-Pacific
region. Providing employers the technology to digitally onboard, pay and manage employees from any device. The
PaySauce platform includes rosters, mobile timesheets, payroll calculations, banking integration, automated payments,
PAYE filing, labour costing, automated general ledger entries and digital employment contracts.
The interim condensed consolidated financial statements for the Company and its subsidiaries (the “Group”) for the
six months ended 30 September 2023 were authorised in accordance with a resolution of the directors for issue on 21
November 2023 and are unaudited.
2. Summary of significant accounting policies
Basis of preparation
These unaudited interim condensed consolidated financial statements have been prepared:
• in accordance with New Zealand Generally Accepted Accounting Practice (“NZ GAAP”);
• comply with the requirements of the New Zealand Equivalent to International Accounting Standard 34: Interim
Financial Reporting (“NZ IAS 34”);
• on the basis of historical cost;
• in New Zealand dollars (NZD), which is the functional currency of the Group, with all values rounded to the nearest one
thousand dollars ($1,000) unless otherwise stated;
• on the assumption that the Group is a going concern;
• should be read in conjunction with the audited consolidated financial statements for the Group as at and for the year
ended 31 March 2023
There are no seasonality or cyclicality influences on the results of the Group.
The unaudited interim condensed consolidated financial statements have been prepared using the same significant
accounting policies and methods of computation as, and should be read in conjunction with, the financial statements and
related notes included in the audited consolidated financial statements for the Group for the year ended 31 March 2023,
other than as disclosed in the sections below.
3. Use of critical accounting estimates and judgements
The preparation of the interim condensed consolidated financial statements requires PaySauce to make a number of
judgements, estimates and assumptions. Estimates and underlying assumptions are reviewed on an on-going basis.
Information about critical judgements and significant estimates used in applying accounting policies that have the most
significant effect on the amounts recognised in the interim condensed consolidated financial statements are included
below.
Going concern
The consolidated financial statements have been prepared on a going concern basis.
The Group made a net loss before tax of $0.267m for six months year ended 30 September 2023 (2022: $0.425m), has
equity at 30 September 2023 of $1.314m (Mar 2023: $1.395m) and net current liabilities of $0.264m (Mar 2023: $0.193m).
The Group now has positive net cash from operating activities before increase in funds due to customers and IRD. The
Group also has further debt facilities of $0.250 million to draw upon as required.
The Directors consider after making due enquiry and having regard to the circumstances which they consider reasonably
likely to affect the Group for the foreseeable future, which is not less than 12 months from the date these financial
statements are approved for issue, that the going concern assumption is valid.
4. Property, plant and equipment
Unaudited
Right-of-
use Asset
(Property)
Office
Equipment
Leasehold
Improvements
Computer
EquipmentTotal
Year ended 30 September 2023$000s$000s$000s$000s$000s
Opening net book value22860466358
Additions4028-2088
Disposals-----
Depreciation(62)(9)(1)(23)(95)
Closing net book value20679363351
As at 30 September 2023
Cost
48015115243889
Accumulated depreciation(274)(72)(12)(180)(538)
Net book value20679363351
2829
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
5. Intangible assets
Unaudited
Development
in progress
Computer
Software
Customer
RelationshipsTotal
Year ended 30 September 2023
$000s$000s$000s$000s
Opening net book value7999862242,009
Additions2224-46
Development costs recognised as an asset422--422
Development in progress recognised as
Software(153)153--
Asset impairment(228)--(228)
Amortisation
-(175)(35)(210)
Closing net book value8629881892,039
As at 30 September 2023
Cost
8622,2523543,468
Accumulated amortisation-(1,264)(165)(1,429)
Net book value8629881892,039
Indicators of impairment were identified for Development in progress assets as at 30 September 2023, with some assets
in this category no longer expected to be completed. Upon assessment of the recoverable amount of the Development
in progress assets, it was determined that an impairment loss of $0.228 million be recognised.
6. Share capital
DateDetailsNotesNumber of Shares$000s
Unaudited
1 April 2023Opening Balance139,207,93513,212
Issue of ordinary shares(i)359,84591
30 September 2023Closing Balance139,567,78013,303
Unaudited
1 April 2022Opening Balance138,583,81913,039
Issue of ordinary shares(ii)273,24474
30 September 2022Closing Balance138,857,06313,113
Fully paid up, ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
ordinary shares are recognised as a deduction f rom equity, net of any tax effects.
(i) On 31 May 2023: Shares issued (unpaid) as part of the FY23 employee share scheme were paid up as tranche 1 of
the scheme vested for those employees who met the vesting conditions. 359,845 shares were fully paid up via a
discretionary bonus approved by the board. This resulted in an issue of 359,845 ordinary shares at $0.2596 per share,
totalling an issue of $0.094m. Directly attributable costs totalled $0.003m, bringing the net share issue to $0.091m.
(ii) On 31 May 2022: Shares issued (unpaid) as part of the FY22 employee share scheme were paid up as tranche 1 of
the scheme vested for those employees who met the vesting conditions. 273,244 shares were fully paid up via a
discretionary bonus approved by the board. This resulted in an issue of 273,244 ordinary shares at $0.2842 per share,
totalling an issue of $0.078m. Directly attributable costs totalled $0.004m, bringing the net share issue to $0.074m.
The interim condensed consolidated statement of changes in equity has been changed from what was presented for the
six months ended 30 September 2022. The disclosure previously summarised the net figure of share based payments
accrued and paid up. These elements are now shown separately on the face of the financial statements, and the issuance
of ordinary shares has been more accurately labelled as share-based payments paid up. The change in disclosure does
not impact the reporting results in any other way.
Dividends
No dividends were declared or paid during the reporting period (SEP 2022: None).
3031
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
7. Earnings / (loss) per share
6 months to
SEP 2023
6 months to
SEP 2022
Basic earnings per share
UnauditedUnaudited
Net loss used in calculating earnings per share ($000s)(267)(425)
Weighted average number of ordinary shares for basic earnings per share139,447,832138,765,982
Basic loss per share (cents)(0.19)(0.31)
There are no financial instruments on issue that will dilute the basic earnings per share amounts for the six months ended
30 September 2023
8. Operating revenue
6 months to
SEP 2023
6 months to
SEP 2022
UnauditedUnaudited
$000s$000s
Revenue f rom contracts with customers
- Processing fees2,5362,142
- Other services revenue3937
Revenue f rom other sources
- Interest income
1,021390
- Other revenue128
Total operating revenue3,6082,577
9. Employee expenses
6 months to
SEP 2023
6 months to
SEP 2022
UnauditedUnaudited
$000s$000s
Employee benefits/entitlements1,8501,502
Employee benefits/entitlements - share based payments340171
Fringe benefit tax10-
Other employee expenses
8887
Total employee expenses2,2881,760
10. Research & Development
6 months to
SEP 2023
6 months to
SEP 2022
UnauditedUnaudited
$000s$000s
Research & development costs expensed
(included in note 9 - Employee expenses under Employee benefits/
entitlements, and note 12 - Other expenses under
Inf rastructure and security)501480
Total research & development501480
11. Finance Costs
6 months to
SEP 2023
6 months to
SEP 2022
UnauditedUnaudited
$000s$000s
Interest paid3819
Finance cost - Interest on lease112
Total finance costs4921
3233
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
12. Other expenses
6 months to
SEP 2023
6 months to
SEP 2022
UnauditedUnaudited
$000s$000s
Advertising, PR and marketing150105
Audit fees4236
Communications and subscriptions140107
Customer and transactional250219
Other overheads229242
Inf rastructure and security143245
Travel6242
Total other expenses1,016996
The allocation of other expenses has been simplified due to the size and nature of the categories presented. The
disclosure for the six months ended 30 September 2022 has also changed from what was presented in the group
financial statements to align the comparative period disclosure with the newly created categories. The change in
disclosure does not impact the reporting results of operations, for the categories presented on the face of the financial
statements.
A provision for other overheads of $108k was released to the statement of profit and loss during the period.
13. Key management personnel and related parties
Key management personnel compensation
Key management personnel are defined as those persons having authority and responsibility for planning, directing and
controlling the activities of the Group, directly or indirectly and include the Directors, the Chief Executive Officer and the
Executive Leadership Team.
The table below summarises remuneration paid to key management personnel.
6 months to
SEP 2023
6 months to
SEP 2022
UnauditedUnaudited
$000s$000s
Directors’ fees9563
Short term employee benefits543470
Share-based payments73-
Total key management personnel compensation711533
Related party transactions and balances
A number of key management personnel, or their related parties, hold positions in other entities that result in them
having control or significant influence over the financial or operating policies of those entities. A number of those entities
subscribe to services provided by the Group. None of the related party transactions are significant to either party.
Outside of these transactions, and the Directors’ fees and short term employee benefits noted above, all other related
party transactions are outlined below:
6 months to
SEP 2023
6 months to
SEP 2022
UnauditedUnaudited
Related party transactions during the period$000s$000s
Cloud hosting services supplied by entities controlled by related parties
Catalyst Cloud Limited6157
SEP 2023MAR 2023
UnauditedAudited
Related party balances payable at period end$000s$000s
Directors’ Fees1611
Cloud Hosting Services911
PaySauce Limited has a standby debt facility agreement with Director Gavin Thompson. The facility totals $0.25M and can
be drawn on demand, within three years from the date of the agreement (December 2021). The interest rate in the agreement is
linked to the floating interest rate of ASB Bank Limited. As at 30 September 2023, no funds have been drawn.
3435
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
14. Reconciliation of net loss after tax to net cash flows from operations
6 months to
SEP 2023
6 months to
SEP 2022
UnauditedUnaudited
$000s$000s
Net Loss after taxation(267)(425)
Add back / (deduct) non-cash & non-operating items:
Depreciation & amortisation
305235
Asset impairments228-
Share based payment expense189115
Other non-cash & non-operating items3619
491(56)
Movement in working capital:
(Increase)/decrease in Trade and other receivables26(12)
(Increase)/decrease in Other assets
123(36)
Increase/(decrease) in Funds due to customers and IRD(689)1,860
Increase/(decrease) in Trade and other payables(301)(114)
Increase in Employee benefits 12272
Increase in Other liabilities358
Net cash inflow / (outflow) from operating activities(225)1,772
15. Employee Share Scheme
The Group entered into an employee share scheme for the year ended 31 March 2024. The new FY24 scheme is different
to the FY22 and FY23 schemes outlined in the financial statements for the year ended 31 March 2023, as follows:
An ESS agreement is entered into between each eligible employee and the Company stipulating the value of ESS shares
granted. Shares are issued quarterly, at the end of each quarter, and the number of ESS shares granted is determined by
the volume weighted average share price on each issue date.
New ESS agreements may be entered into throughout the course of the financial year for new employees as they become
eligible, with the benefit pro-rated for the proportion of the year those employees are eligible from. Equally, employees
who leave or become ineligible for the scheme will forfeit their right to be issued shares as part of the ESS agreement.
ESS shares are performance based on the achievement of the employees personal KPI objectives.
This equity settled remuneration attracts income tax on the employees. The income tax and other deductibles are
deducted and the net amount of ordinary shares are issued to employees.
The ESS shares for the FY24 scheme have been accrued, but not yet been issued for the first two quarters for FY24. The
issue for these two quarters is due to be completed in November 2023, with the volume weighted average share price to
be calculated on the issue date.
Employee share scheme expenses, and other share based payments for the six month period ended 30 September 2023
are as follows:
Unaudited
March 2024
Employee
Share Scheme
March 2023
Employee Share
Scheme
March 2022
Employee Share
Scheme
Other Shared
Based
PaymentsTotal
For the period ended
30 September 2023$000s$000s$000s$000s$000s
Share based payment
expense, net of tax13628619189
Tax on share based payment
expense73199-101
Total share based payment
expense
209471519290
The share based payment reserve is used to record the accumulated value of unvested shares and share options that
remain exercisable.
Unaudited
Share based payment reserve$000s
Balance at 1 April 2023242
Employee Share Scheme (31 March 2022) - Share based payment expense, net of tax 6
Employee Share Scheme (31 March 2023) - Share based payment expense, net of tax28
Employee Share Scheme (31 March 2023) - Shares vested and fully paid up(94)
Employee Share Scheme (31 March 2024) - Share based payment expense, net of tax 136
Other share based payment expenses, net of tax19
Balance at 30 September 2023337
3637
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
Company Directory
Directors:
Asantha Wijeyeratne
Gavin Thompson
Jim Sybertsma
Mark Samlal
Michael O’Donnell
Shelley Ruha
Registered Office:
85 The Esplanade
Petone, 5012
New Zealand
Website:
www.paysauce.com
Auditor:
Grant Thornton New Zealand Audit Limited
Stock Exchange:
NZX
Share Registrar:
Link Market Services Limited
80 Queen Street
Auckland, 1010
New Zealand
NZ Company Number:
1719868
NZBN:
9429034458099
16. Funds due to customers and IRD
As a PAYE intermediary, PaySauce collects funds from clients which are payable to both clients’ employees (as the
employees’ net wages and salaries) and the IRD (as the applicable PAYE, student loan and other IRD liabilities). These
funds are included in PaySauce’s cash and term deposit balances and in accordance with section RP6 of the Income Tax
Act 2007, PaySauce can earn interest on these funds, but the funds must only be used as follows:
• Payment of net salary or wages to employees of PaySauce’s clients.
• Payment of IRD obligations resulting from pays run on PaySauce software to the IRD, including PAYE deductions,
student loan deductions, superannuation contributions and any other amount of tax withheld from a payment of
salary or wages to IRD.
Under the financial reporting standards movements in these funds do not meet the definition of either investing or
financing activities and so must be classified as operating cash flows. However as stated above the use of these funds is
restricted and they cannot be used to cover other PaySauce expenses, the company has therefore presented operating
cash flows in the Cash Flow Statement as both before and after this movement in funds. The value of restricted funds at
reporting date is represented by funds due to customers and IRD as disclosed in the Statement of Financial Position.
Term deposits were reclassified from cash and cash equivalents in the consolidated financial statements in the year
ended 31 March 2023. The comparative figures on the face of the consolidated statement of cash flows for the six month
period ending 30 September 2022 have changed as a result.
17. Events occurring after the reporting period
No adjusting or significant non-adjusting events have occurred between the reporting date and the date of authorisation.
38
FINANCIAL STATEMENTS
---
2024
2023
Results presentation
SIX MONTHS ENDED 30 SEPTEMBER 2023
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 Interim 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.
Disclaimer
Please refer to the Glossary for definitions of key metrics used in this presentation.
All currency amounts are in New Zealand Dollars unless stated otherwise.
2
PaySauce
Jaime
Monaghan
Chief Financial Officer
Asantha
Wijeyeratne
CEO, Co-founder
Agenda
1. Intro & Strategy
2. Financial Results
3. Q & A
3
PaySauce
Intro & Strategy
Asantha Wijeyeratne
4
PaySauce
Maiden positive earnings
in year of transition
Annualised Recurring
Revenue (ARR)
Up 32% on Sept 2022
EBTDA
2
Up $455k YoY reversing the
Sept 2022 loss of $200k
$
255
k
$
7.4
m
Cashflow
Generating cash flow
f rom operations
1
$
464
k
48
Rule of 40
Above industry
benchmark
1 before funds due to customers and IRD. 2 Earnings before Tax, Depreciation and Amortisation
• Gen 2.0 Payroll Engine
• Agreement to deliver a proof of concept for embedded
payroll
• First period of positive EBTDA
2
• Generating cash from operating activities to reinvest for
long term growth
• Surpassing the Rule of 40 benchmark
5
PaySauce
FY24 - a year of transition
• Strong ARR growth continued - up 32% YoY
to $7.4m
• Interest income up 105% YoY
• Processing Fees growth lower at 15% YoY as
the business transitions
• Growth in processing fees came from
8% increase in new customers, and a 7%
increase in average processing fees per
customer
• Reached market penetration in dairy and
entry into new verticals is still in its infancy
32
%
$
7.4
m
Annualised
Recurring
Revenue (ARR)
$8m
$4m
$6m
$2m
MAR 23SEP 23SEP 22MAR 22SEP 21MAR 21SEP 20
InterestProcessing fees
6
PaySauce
We are in transition to our
platform for the future
Gen 1.0 goPayroll +
SmoothPay (acquisition)
Serving 1500 customers in
NZ, AU and PI
Gen 1.0
Existing code base serving
5600 customers In NZ
Gen 2.0
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Gen 2.0 Payroll
Engine Rev
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
Embedded
Payroll
Micro-business
App
A
P
I
PaySauce
Gen 2.0
Engine
A
P
I
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
4−6 months
sales and
implementation
TIME TO
SALE
Download the app
and pay staff the
same day
TIME TO
SALE
Serve new
customer base
following
implementation
SALES
CYCLE
Support
Accounting and
Direct marketing
channels
SALES
CYCLE
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
PaySauce
7
Gen 2.0 Payroll Engine affords us
commercial optionality
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Gen 2.0 Payroll
Engine Rev
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
Embedded
Payroll
Micro-business
App
A
P
I
PaySauce
Gen 2.0
Engine
A
P
I
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
4−6 months
sales and
implementation
TIME TO
SALE
Download the app
and pay staff the
same day
TIME TO
SALE
Serve new
customer base
following
implementation
SALES
CYCLE
Support
Accounting and
Direct marketing
channels
SALES
CYCLE
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
8
PaySauce
Strategic priorities
Re-invest for
long term
growth
Obsess over
customers
STRATEGIC PRIORITY #2STRATEGIC PRIORITY #1
Win-win-win
partnerships
Awesome
people
STRATEGIC PRIORITY #3STRATEGIC PRIORITY #4
Highlights
Embedded payroll
opportunity
Micro business payroll
opportunity
Enhanced infrastructure
and security
Highlights
Accelerated
development of Gen 2.0
payroll engine
Product improvements
reduced customer
support calls
PayNow saved customers
an estimated $1.1m in
interest and fees
Highlights
Strengthened banking
connections through API
and Akahu
Increasing our reach into
local accounting firms
National brand
exposure through rugby
sponsorships
Highlights
4 new senior roles in Sales
and Product teams
New employee share
scheme for FY24
Winner of the 2degrees
Wellington Regional
Business Excellence Awards
9
PaySauce
Financial Results
Jaime Monaghan
10
PaySauce
Customer value growth
SEP
CAC
$
508
ARPU
$
85
At 30 September 2023
Total Customer
Lifetime Value
$
50.9m
19
% YOY
New customer joins
PaySauce
Customer Acquisition
(CAC)
$508 per customer
Customer pays a
monthly subscription
Recurring Revenue
(Monthly): $85per
customer
Customer Lifetime
Value (CLTV)
$7,070 per customer
Customer receives
support
Cost to Serve (CTS)
(Monthly): $21 per
customer
+37%
YOY
+ 22%
YOY
CTS
$
21
Customer
Lifetime
9.2
yrs
CLTV
$
7,070
CLTV : CAC
14:1
0%
YOY
-20%
YOY
10%
YOY
-17%
YOY
Customer stays with
PaySauce
Customer Lifetime
Average monthly churn
of 0.91%
“PaySauce is easy to
use, saves me time...
oh, and the customer
support is amazing”
Craig Turner
Espresso Repair
Specialists
Macro-economic conditions and cost
discipline support value accretio
11
PaySauce
• CAC: Fewer customers acquired,
and cost to acquire increased
• Cost to serve each customer
held at $21 per month as
inflationary pressures were offset
by efficiency improvements in
operations
• Revenue growth supported by
increased ARPU, new customers
and increased interest revenue
• Revenue per FTE increased to
$84k
• Customer churn increased to
0.91% per month, reducing the
implied customer lifetime to just
over 9 years
Customer
Acquisition
(CAC)
SEP 2023SEP 2022YOY Change
Customer acquisition costs ($000s)41834820%
New customers (organic)
822939
(12%)
CAC per addition
508371
37%
Recurring
Revenue
SEP 2023SEP 2022YOY Change
ARR at end of period ($000s)7,3785.57632%
Recurring revenue for the period - Total ($000s)
3,5512,525
41%
ARPU (monthly) at end of period ($)
8570
22%
FTEs
4338
13%
Revenue per FTE ($000s)
8468
24%
SEP
Cost to Serve
(CTS)
SEP 2023SEP 2022YOY Change
Recurring revenue ($000s)3,5512,52541%
Less cost to serve ($000s)
(873)(759)
15%
Gross margin ($000s)2,6781,76652%
Gross margin %
75%70%
5pp
CTS per customer (monthly) at end of period ($)
2121
-
Customer
Lifetime
SEP 2023SEP 2022YOY Change
Customers at end of period7,2026,6588%
Average monthly churn rate for the period (%)
0.910.76
20%
LTV per customer at end of period ($)
7,0706,424
10%
Total customer LTV at end of period ($000s)
50,91842,770
19%
LTV:CAC ratio at end of period
14 : 117 : 1
(20%)
12
PaySauce
Delivering maiden positive earnings
• Maiden positive EBTDA result
of $255k
• Positive net operating
cashflow of $464k*
• PaySauce grew total
recurring revenue 41%
YoY due to increased
interest income, additional
customers and additional
ARPU
• Gross margin grew 52% YoY
from higher revenue and
greater efficiency
SEP 23 ($000s)SEP 22 ($000s)Change
Earnings / (Loss) before tax, impairment,
depreciation & amortisation
255(200)(227%)
Net operating cashflow*464(88)$552k
Cash and Cash equivalents*356609$253k
Total recurring revenue5,7152,525 41%
Gross margin2,6771,76652%
Gross margin %75%70%5pp
Net loss(267)(425)(37%)
*excludes funds due to customers and the IRD, collected in performing our role as a PAYE intermediary,
13
PaySauce
Sustainable growth & the rule of 40
The rule of 40 provides a measure of two
key metrics for SaaS businesses: growth
and earnings.
PaySauce uses the combination of recurring
revenue growth, and EBTDA* to assess
against this measure.
In a year of transition, PaySauce has
continued to increase profitability while the
rate of growth has slowed. A score of 40
is widely seen as the benchmark for SaaS
companies. At 48 - PaySauce has surpassed
this benchmark with annual recurring
revenue growing +41% and an improved
EBTDA margin of 7%.
*Earnings before Tax, Depreciation and Amortisation.
Recurring revenue growthEBTDA Margin (%)
SEP 23MAR 22SEP 22MAR 23SEP 21MAR 21
-100%
-50%
0%
50%
100%
BenchmarkPYS Rule of 40
100
-25
0
25
50
75
SEP 23MAR 23SEP 22MAR 22SEP 21MAR 21
-23836716748
14
PaySauce
Positioned for an acceleration in growth
Large opportunity by
leveraging the Gen 2.0
Payroll engine
• Enterprise sized, global
employment providers seeking
embedded payroll solution.
• The product is scalable. Embedded
payroll provides high volume
payroll in a very cost effective,
efficient and scalable way.
Challenging macro-
environment
It is supportive of interest revenue
but challenging for customers.
Growth advances
We are advancing our plans to grow
into new verticals and deliver our
micro-business app.
Our goals are in sight
The Gen 2.0 Payroll engine enables
a faster path to $10 million ARR and
beyond.
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Gen 2.0 Payroll
Engine Rev
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
Embedded
Payroll
Micro-business
App
A
P
I
PaySauce
Gen 2.0
Engine
A
P
I
Embedded payroll opportunity
Rapid global
scalability by
embedding into
existing providers with
large customer base
End customer
relationship and
support is owned
by the 3rd party
provider
Fixed term, multi
year contract,
invoiced annual in
advance
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
Tax and
compliance
filing
integration
Payment
solution
integration
Embedded
Payroll
Micro-business
App
Configure
jurisdiction
rules
PaySauce
Gen 2.0
Engine
Very large
under-served market
of micro-businesses
with 1−5 employees
acquired directly and
through accountants
PaySauce owns
the customer
relationship and
provides direct
support
Monthly
subscription on a
pay as you go basis
CUSTOMER
ACQUISITION
CUSTOMER
SUPPORT
REVENUE
RECOGNITION
4−6 months
sales and
implementation
TIME TO
SALE
Download the app
and pay staff the
same day
TIME TO
SALE
Serve new
customer base
following
implementation
SALES
CYCLE
Support
Accounting and
Direct marketing
channels
SALES
CYCLE
Micro-business App opportunity
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
C
O
N
N
E
C
T
S
T
H
R
O
U
G
H
A
P
I
15
PaySauce
Questions
PaySauce
16
Glossary
Recurring Revenue: Recurring revenue
is revenue that is expected to repeat
each period into the future. For
PaySauce, this is directly linked to the
number of customers, their size, and
the number of pays they run using the
PaySauce payroll products. There are
currently two sources of recurring
revenue - processing fees and interest
income.
ARR: The total recurring revenue for the
last calendar month of the reporting
period, 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: 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 (monthly): 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.
LT V: Lifetime value is the estimated
value of a customer over its lifetime with
PaySauce. This is calculated by taking
the monthly ARPU multiplied by the
gross margin percentage, then divided
by the monthly churn percentage.
Total Customer LTV: Total customer
lifetime value is the lifetime value
multiplied by the total customers.
LTV : CAC: This ratio reflects the return
on investment for customer acquisition.
It is calculated by dividing the lifetime
value of a customer by the customer
acquisition cost (per addition).
PayNow: A unique feature in the
PaySauce mobile application, which lets
employee’s access the money they’ve
already earned, effectively letting them
choose their own payday on demand.
Refer to paysauce.com/paynow for
further details.
Rule of 40: The rule of 40 provides
a balanced measure of two key
metrics for SaaS businesses: growth
and profitability. PaySauce uses the
combination of recurring revenue
growth, and EBTDA to assess against
this measure.
EBTDA: Earnings Before Tax,
Depreciation and Amortisation
is calculated by adding back
depreciation, amortisation and
income tax expense to the amounts
reported in the NZ IFRS-based financial
statements. PaySauce believes that
this measure provides useful insights to
measure the performance of PaySauce
as a SaaS business.
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).
Refer to the PaySauce Annual Report for
further information.
17
PaySauce
85 The Esplanade, Petone,
Lower Hutt 5012, New Zealand
www.paysauce.com/investor
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.