How Does Pushpay Make Money

Pushpay is an online payment platform and app that allows users to make donations to churches and other not-for-profit organisations of their choice in Australia, New Zealand, the US and Canada.

It runs on a subscription-based model, charging a monthly fee between $100 and $10,000, depending on the size of the organisation.

Despite being based in New Zealand, the fintech's gaze is firmly set on the US's so-called "faith sector", which hosts megachurches such as Hillsong which hosts congregations in the thousands.

Of 100 of the US's largest churches, 55 have adopted Pushpay for accepting donations from attendees, according to information released by Pushpay in November.

"It's been a bit of a rocket-ship ride," said Mr Heaslip.

He estimates $US130 billion ($182 billion) worth of donations are made to churches in the US each year; 97 per cent of Pushpay's revenue comes from North American transactions.

Pushpay has abundant room for further growth, having broken into the virtually untapped religious sector in the US, according to Royal Bank of Canada analyst Garry Sherriff.

"The US market remains under-penetrated with less than 5 per cent market share of the US church market, implying plenty of runway for [Pushpay] to capture additional customers and further penetrate their existing customer base," said Mr Sherriff.

"We found all of the people in that space are really under-funded and old-fashioned in the way that they approached the market," said Mr Heaslip.

Reports of the December donations rush came as part of an announcement on Monday it had finally entered positive cash-flow territory, having reached its break-even goal at the end of 2018.

Pushpay said it began breaking even by the end of 2018 and is now cash-flow positive. Mr Heaslip said his company would start generating positive net profit by March 31.

Monday's announcement marks a significant turning point for the tech firm's reputation, said Mr Sherriff.

"This is a catalyst for the stock in our view as some small-mid cap institutional investor mandates prohibit investing in unprofitable or cash flow negative companies," he said. .

Shareholders who bought into the company when it first listed on the ASX in October 2016 have enjoyed a 82 per cent increase in the value of their shares, despite value dropping by more than 27 per cent over the past year.

The sharemarket responded positively to the news, with Pushpay's share price moving up 5 per cent on the day to $3.04.

Pushpay confirmed its revenue guidance of between $US97.5 million to $US100.5 million, a gross margin exceeding 60 per cent for the six months ended 31 March 2019 and will have a positive earnings before interest, tax, depreciation, amortisation and foreign currency gains or losses for the year ending March 31.

As foreshadowed in its November interim report, Pushpay will no longer provide quarterly reports. It will continue to provide six-month and annual reports, said Mr Heaslip.