Tyro 2024 AGM and reaffirmation of FY25 guidance

Tyro Payments Limited reaffirmed its FY25 guidance, projecting gross profit between $218 million and $226 million and an EBITDA margin of approximately 28%, following strong FY24 results showing 9.1% gross profit growth and a 26.4% EBITDA margin.

Summary

• Tyro Payments Limited held its 2024 Annual General Meeting (AGM).
• The company reported strong FY24 financial performance, with gross profit increasing by 9.1% to $210.8 million and EBITDA margin rising to 26.4%.
• FY24 Net Profit After Tax was $25.7 million, more than four times higher than FY23.
• FY24 Free Cash Flow was $30.4 million, more than five times higher than FY23.
• Tyro reaffirmed its FY25 guidance, expecting gross profit between $218 million and $226 million and an EBITDA margin of approximately 28%.
• The company highlighted progress on strategic initiatives focused on enhancing its customer proposition, including product innovation, pricing transformation, and improved operating efficiency.
• Tyro is uniquely positioned for growth opportunities due to its end-to-end technology stack, diverse distribution channels, and integrated payments and banking solutions.
• The company discussed changes to its remuneration plans, including increased weighting of financial measures and greater disclosure.

Sentiment

Score: 7

Explanation: Overall positive sentiment due to strong FY24 results and reaffirmed FY25 guidance. However, some concerns remain regarding economic headwinds and competition.

Positives

• Strong FY24 financial performance with significant growth in gross profit and EBITDA.
• Reaffirmation of FY25 guidance indicating continued growth and profitability.
• Progress on strategic initiatives enhancing customer proposition.
• Unique market positioning for future growth.
• Significant increase in net profit after tax and free cash flow in FY24.
• Improved EBITDA margin in FY24 and projected for FY25.
• Large and growing addressable market for new verticals.

Negatives

• Share price not reflecting strong financial performance.
• Uncertainty in the near-term due to economic headwinds impacting small businesses.
• Potential loss of merchants to Lightspeed, although impact so far has been smaller than expected.

Risks

• Economic headwinds impacting small businesses.
• Potential loss of merchants to competitors like Lightspeed.
• Changes related to the RBA Payments Review, although Tyro believes it is well-positioned.
• Market and macroeconomic conditions could deteriorate.

Future Outlook

Tyro expects continued gross profit growth and improved profitability in FY25, with gross profit between $218 million and $226 million and an EBITDA margin of approximately 28%. The company's outlook is subject to no material deterioration in market or macroeconomic conditions and several key assumptions.

Management Comments

• 'We look forward to meeting with our shareholders at the 2024 Annual General Meeting today.'
• 'We are pleased with the financial performance of the business in FY24, which saw us grow gross profit by 9.1% to $210.8m and increase our EBITDA margin from 21.9% to 26.4% year-on-year.'
• 'We are reaffirming this guidance today, and we continue to expect gross profit for FY25 to be between $218m and $226m, and for our EBITDA margin to increase to c.28%.'
• 'FY25 to date (4 months to 31 October) is in-line with our expectations, and consistent with our guidance.'

Industry Context

Tyro's performance and outlook are presented against a backdrop of economic headwinds affecting small businesses and competition from companies like Lightspeed. The company's response to the RBA Payments Review and its focus on innovation and cost management are key factors in its strategy.

Next Steps

• Continued focus on balancing growth and profitability.
• Further development and launch of new verticals (unattended payments and health adjacency).
• Providing further updates on the RBA Payments Review.

Key Dates

Keywords

Tyro Payments, FY25 Guidance, Financial Results, Payments, EBITDA, Gross Profit, AGM, Australia, Merchants