I think the no new customers argument is based on the following...

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CleverLongboat

27 Posts.

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30/12/20

12:33

Post #: 49862576
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Originally posted by harryAJX: ↑

I disagree that growth has slowed down. In fact it recently accelerated. Donor management system customer growth half on half in the most recent half was the highest it has been since 1H18. Revenue growth on pcp was highest since 2H18. This was apparently assisted by a rush to get software capability installed ahead of covid restrictions so who knows what the next results will reveal, ebitdaf forecast suggests continued growth.

In terms of target markets, straight from their 2020 annual report: "In the long term, Pushpay is targeting over 50% of the medium and large church segments, an opportunity representing over US$1 billion in annual revenue." Their most recent full year revenue was us$130m. So, at let's say a cagr of 40%, that's 6 years of growth there, if they can capture it that quickly which I would doubt. I agree they should be experimenting now to discover their next market for growth optionality but wouldnt say it is super urgent, and they have been entertaining discussion on this topic.

A bigger concern for me would be the downfall of churches more generally. Amazon and Afterpay for example (no doubt other companies as well, but these 2 I follow closely) are expanding their efforts in collecting donations from customers and with churches across the US closed and e-commerse booming might the medium of the bulk of donations shift away from churches? But to prevent this, churches will want to leverage the best technology available for motivating attendance, involvement and generosity from patrons.. hello churchstaq $$

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I think the no new customers argument is based on the following table from their presentation:

basically this says that DMS and CMS customers grew, but it was all cross selling so zero new external customers.

I understand that management has long term goals of getting to a 50% market share but is that supportable when they are seeing no new customer inflow?
Would love to understand what Im misunderstanding here

PPH Price at posting: $1.73 Sentiment: None Disclosure: Not Held
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