News and research before you hear about it on CNBC and others. Claim your one week free trial for StreetInsider Premium here.
Toronto, Ontario–(Newsfile Corp. – May 30, 2022) – Hank Payments Corp.(TSXV: HANK) (“Hank” or the “Company”), a North American software-as-a-service (SaaS) leader in consumer FinTech, today announced record organic quarter-over-quarter revenue growth, record gross margins, continued ARR and LUM (defined below) and, in addition to the B2C application of personal financial well-being through the automation of payment management, which improves the management of household cash flow and debt and the financial health, accelerating its B2B go-to-market strategy to become the industry’s leading Enterprise SaaS payment platform.
Based in Canada with operations in the United States, Hank is on a mission to transform personal financial well-being and outdated consumer financial technology by delivering a best-in-class payment platform and payment management capabilities. Hank’s modern, sleek, and proprietary cloud-based solution revolutionizes the way consumers and lenders manage payments with speed, automation, ease-of-use, and best-in-class service, along with B2B SaaS enterprise solutions that enable Hank to supply bank, lender, originator, debt settlement companies and on-demand work platforms.
FINANCIAL HIGHLIGHTS – CONTINUED SOLID FINANCIAL FUNDAMENTALS
- Revenue for the third quarter ended March 31, 2022 increased 24% year over year to $1,378,598. (Nine months $3,863,691, 21%)
- Gross margins reached an all-time high of 89.2%, consistent with our historical trajectory.
- Quarter-over-quarter revenue increased 6% as the company benefited from the recovery in the automotive industry.
- Annual Recurring Revenue (ARR) and Liabilities Under Management (LUM) remain strong.
OPERATIONAL AND STRATEGIC MATTERS – CORPORATE EVOLUTION AND LOYALTY TO SHAREHOLDER VALUE
The company’s historical B2C sales channel, namely the SMB car dealership channel, continues to perform well and has driven predictable growth in consumption, consumer loan payment performance and related analytics, generating for the company stable and predictable revenue growth and providing the necessary resources and expertise. to win larger contracts in this channel and allow the company to focus on the additional goal of advancing its B2B SaaS Enterprise customer opportunities.
The company is pleased with the exceptional level of interest and demand it has received in the Enterprise SaaS space. Accordingly, the company, as part of a natural evolutionary progression, is pivoting its workforce, other resources and spend base from B2C retail customer digital sales strategies in favor of trading a SaaS potentially large (and cost effective) B2B business opportunity. licensing deals that allow Hank to power banks, lenders, originators, debt settlement companies, and gig worker platforms.
On the ledger expense side, operating expenses in the quarter increased in part due to investments in digital marketing and related overhead, spending by public companies, advances in the technology platform to support Enterprise SaaS proposals as well as the costs associated with evaluating potential strategic transactions.
The company cautiously addressed this issue by identifying and acting on several cost reduction measures post-quarter end, namely the elimination of various roles not directly contributing to the B2B Enterprise SaaS strategy, which will result in significant ongoing cost savings as Hank focuses on executing highly accretive enterprise SaaS licensing agreements and strategic partnerships that, when finalized, will enable mass market penetration, with acquisition costs of significantly lower customers and relative lower customer service costs as scale is achieved.
On the M&A front, the company performed a top-to-bottom analysis of its pending acquisition funnel with a laser focus on how much Hank’s increased shareholder value resulted from said acquisitions versus the amount dilution Hank shareholders will experience from said acquisitions and has determined that it will not proceed with the two identified transactions, including the previously announced mortgage servicing transaction. Overall, the organic growth the company is currently enjoying and expected to benefit from its current funnel of opportunities will bring more users to the Hank platform than proceeding with the two proposed acquisitions, without the company incurring the execution and integration risks and costs associated with such acquisitions. The Company is open to evaluating accretive transactions, however, strategically, the Company has determined that the use of its resources is best suited to meet near-term demand for Enterprise SaaS accounts.
GENERAL CORPORATE QUESTIONS
The Company has granted a total of 150,000 Hank stock options under its stock option plan, with an exercise price of $0.15 and an expiry date. expires May 30, 2024. The options are subject to the customary provisions of Hank’s stock option plan. Jeff Guthrie, president and chief operating officer, will be leaving the company for personal reasons to care for a family member’s illness effective May 31, 2022. The company and its board of directors wish him and his family all the best during this difficult personal time. A detailed analysis of Hank’s financial condition and results of operations is provided in the financial statements and MD&A for the three and nine month periods ending March 31, 2022, filed on SEDAR.
Commenting on the quarter and year-to-date results, Michael Hilmer, President and CEO, commented, “I am very pleased with the work the team has done to grow the SMB Channels business while evaluating transactions and associated planning for our Enterprise SaaS funnel. Personally, I would like to thank Jeff for his dedication to Hank and offer my best wishes for a speedy resolution to his family health situation. I would also like to thank our other members of the existing and outgoing team for their exceptional hard work as we qualified opportunities and set Hank on a solid, disciplined spending and growth trajectory. I’m very excited about the breadth and economy of the Enterprise funnel SaaS that has continued to grow across many strategic verticals, as well as key partnerships that we look forward to. announce over the summer in conjunction with a decline in operations costs and expected increases in gross margin in dollars.
About Hank Payments Corp.
Hank is a SaaS-based consumer fintech company. Hank’s industry-leading cloud-based software platform (the “Hank Platform“) acts as the manager of a consumer’s financial budget using powerful technology to automate a consumer’s cash flow and personal payments. Through its FDIC (Federal Deposit Insurance Corporation) insured banking partners the United States, Hank helps consumers in all 50 states find funds in their The Hank platform asks its banking partners to debit consumers when they have money, store money in accounts insured by the FDIC, then automatically pay bills and loans as they come due—often sooner than needed Half of Hank’s customers are financially strong and use the Hank platform for convenience, while the other half improve their payment performance through the Hank platform. Hank customers pay an ongoing monthly setup and processing fee while remaining on the Hank platform for an average of three years. Hank continues to innovate and plans to release more advanced features for its growing customers. mer base to provide greater visibility into their cash flow, credit performance and ability to borrow or refinance at lower rates, including introducing Hank’s clients to interested lenders.
This press release may contain forward-looking statements (within the meaning of applicable securities laws) that reflect the Company’s current expectations regarding future events. Forward-looking statements are identified by words such as “believe”, “anticipate”, “project”, “expect”, “intend”, “plan”, “will”, “may”, ” estimate” and other similar expressions. These statements are based on the Company’s expectations, estimates, forecasts and projections and include, but are not limited to, statements regarding the future success of the Company’s business. Financial performance figures in Canadian dollars, unless otherwise indicated by “U” representing US dollars.
The forward-looking statements contained in this press release are based on certain assumptions, including, without limitation, the shares commencing trading on the TSXV. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Several factors could cause actual results to differ materially from the results discussed in the forward-looking statements. Accordingly, readers should not place undue reliance on these forward-looking statements. Further, these forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether due to new information, future events or otherwise.
FOR MORE INFORMATION, PLEASE CONTACT:
For more information about Hank Payments Corp., please contact: Jason Ewart, EVP Capital Markets, at 1-833-HANKPAY. For Investor Relations, please contact [email protected] and visit the Company’s website at www.hankpayments.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/125877