TYR: #1 Stock Pick for CY2021, page-3

@illusivedreams, TYR is not yet profitable.

This reflects their continued investment in attracting more merchants to their ecosystem, the investment in their team and their commitment to developing their payments and business banking products.

TYR has consistently and transparently told the market that they are not expecting to be NPAT profitable in the near term -- this is their strategy. They are pursuing growth over profitability at this stage of their evolution. I think they can consistently grow the top line at 20%+ CAGR over the next 5 years, which would put them at a very sizeable scale.

Tyro has achieved a gross profit CAGR of circa +29% over the FY14-FY19, which is impressive in my books.

Moreover, employee benefit expenses (excluding share-based payment expense) have continued to decline as a percentage of gross profit. This highlights its operational leverage.

Once the time comes to 'harvest' profits from the business, it will be highly profitable. They will need to scale back investments for growth and overheads and the ecosystem of customers will be a cashflow machine.

Initial NPAT profitability in FY23 onward is not out of the question.

TLDR: the financials of Tyro reflect their focus on growth over profitability.

T.E.P.