I don't agree that that the banking licence is the cause of...

I don't agree that that the banking licence is the cause of Tyro's price decline.

In my opinion, the market has soured Tyro and sold it down for two main reasons:

1) Inflation/"Cost of Living Crisis" - Tyro's transaction volume is heavily concentrated in hospitality and retail. These are two areas of consumer spend that are hit hardest and are hit first when consumers tighten their belts. I know the argument that higher prices should result in higher transaction volumes, because consumers are paying more for each transaction. But this doesn't make sense to me for discretionary spend. When consumers tighten their belts, they don't spend at all. So higher volumes from higher prices doesn't make sense to me, unless we're talking non-discretionary spend, which we aren't.

2) Interest Rates/"Higher-for-longer" - This goes hand-in-hand with the first point. Now that it is apparent that interest rates are unlikely to be cut anytime soon, the market is pricing in the impact that higher interest rates will have on consumer spend, and therefore on Tyro's transaction volume and business.

But in my opinion, after reviewing Tyro's last financial update again (1H 24), I think Tyro has been weathering these two headwinds quite well. It still managed to grow hospitality billings (1.8% YoY) and retail billings (2.1% YoY) despite the higher interest rates and cost of living pressures. It's vertical business, which is much newer, and non-discretionary, grew at a much healthier rate (Health 24.2% YoY; Services 7.2% YoY). These are relatively new areas for Tyro, and in my opinion have a lot of potential for strong growth going forward.

The one area of the business that is letting Tyro down is the Bendigo Bank partnership. For whatever reason, the number of Bendigo Bank businesses offering Tyro declined 16.5% YoY, and the Bendigo Bank transaction volume declined 10.8% YoY. I'm not sure why, and I'd be interested to hear from others on what they think, but my feeling is that this decline might be due to businesses leaving Bendigo, rather than leaving Tyro.

Consumer spend has been hit even harder since 31 December 2023. So I am expecting Tyro to have experienced flat or negative grown in its transaction volumes in their next report. Until interest rates start to come down, all businesses that rely on discretionary spend are going to be hit in my opinion. I'm also expecting the Bendigo business to have declined further as well.

But on the upside, I'm expecting to see continued growth in Tyro's vertical business, continued cost discipline, continued EBITDA margin expansion, improved Free Cash Flow, and improved profitability. In my opinion, once interest rates start to come down (assuming we haven't been tipped into a recession), Tyro will return to solid growth, offsetting the loses from the Bendigo Bank partnership.

This is all in my opinion. Please do your own research.