Hank Payments Provides Financial and Corporate Update; Record Gross Margins Approach 90%, Record ARR and 24% YOY Revenue Growth
Toronto, Ontario–(Newsfile Corp. – April 19, 2022) – Hank Payments Corp. (TSXV: HANK) (“Hank” or the “Company”), a North American leader in consumer FinTech Software-as-a-Service (SaaS) announced today record quarter-over-quarter organic revenue growth and Annualized Recurring Revenue (ARR), record gross margins and acceleration of its go-to-market strategy and growth of its position across all 50 States as the industry-leading SaaS platform for personal financial wellness, through automating critical payments management resulting in improved household cash flow and debt management and overall financial hygiene.
Headquartered in Canada with operations in the United States, Hank is on a mission to transform outmoded personal financial wellness and consumer financial technology through offering best-in-class payment management capabilities. Hank’s modern, elegant and proprietary Cloud based solution is revolutionizing the way both consumers and lenders manage payments and benefit from the resulting data (including the effects of rising inflation and interest rates) by bringing the entire process into the 21st century with speed, automation, ease-of-use and best-in-class service.
FINANCIAL HIGHLIGHTS
- Gross margins grew to an unprecedented 89.2%.
- Record Annualized Recurring Revenue.
- Revenue for the third quarter ended March 31, 2022, grew 24% year over year to $1.38 million.
- Record Liabilities Under Management (LUM).
- Revenue quarter over quarter grew 6% as the Company benefits from the recovery in the auto industry.
Hank has historically focused on the vehicle industry channel, where continuing inventory shortages and high demand for vehicles have had a significant impact on the cost of buying a new or used vehicle in 2021 and 2022 for consumers as evidenced by compelling data from Hank’s budgeting and cash management platform. For the fifth consecutive quarter, Hank’s data has shown that monthly payments have risen from U$521 to U$611, or 17.3%, before the effects of rising interest rates take hold. Hank expects its data to be highly valuable to emerging large-scale commercial lenders, originators, and servicers who wish to offer consolidation or other remediation type of loan facilities to assist consumers in improving their cash flow.
While these trends have been principally driven by inflation and vehicle chip shortages, it is anticipated that rising interest rates will amplify the problem through 2022 and beyond, putting considerable pressure on household cash flow. This is the problem Hank was designed to solve and we continue to improve the financial lives of consumers that use Hank to automatically manage their critical payments and cash flow.
In comparison, over the same period, the average monthly mortgage payments under Hank have remained steady at U$1,460, as consumers benefited from historically low-interest rates. Moving forward it is projected that mortgage payments will begin to mimic the rise in auto payments in an environment of steadily rising inflation and interest rates. Payments related to variable rate mortgages, credit card debt, student loans and vehicle finance rates are all expected to climb.
Hank’s services are uniquely positioned to address this economic trend and in particular, the emerging problems that consumers are facing as mortgage rates increase including as follows:
CORPORATE UPDATE
Hank is pleased to report that it is finalizing the acquisition of the previously announced Mortgage Payment Management platform to bring the power of Hank to consumers and channels already connected to that platform. Upon closing, management expects the Liabilities Under Management (LUM) and resulting revenue to climb quickly through leveraging Hank’s existing marketing and SaaS technology platforms that the target company is not benefitting from today. The migration of 600 mortgages announced March 08, 2022, continues on schedule and is expected to conclude in the coming weeks.
The Hank platform is emerging rapidly and is expected to include large customer and channel partnership arrangements that are expected to provide material customer growth in the following key market segments:
- Gig-Workers
- Banks and Lenders
- Debt Settlement
- Debt Management
- Credit Counseling
The Company is in various stages of discussions with enterprise sized companies in each category and those companies already have access to millions of consumers who can benefit from the Hank platform.
By powering channels that already serve consumers, Hank avoids material customer acquisition costs and dramatically increases access to consumers while preserving its attractive margin and long-term annual recurring revenue profile.
Strategic investments are being made to accommodate expected launches in the above categories. For example, Hank is advancing its multi-tenant platform structure to accommodate more data and API driven relationships including the ability for more Banks to power the treasury component of Hank for their own consumers allowing for distribution of deposits and processing. These important advancements will elevate Hank within the SaaS payment technology sector and we look forward to announcing key wins over the coming quarters.
The Company remains devoted to its existing bread and butter channels with highly predictable growth and looks forward to amplifying growth through large scale strategic wins and transactions in this highly predictable small and medium sized business channel market.
“Hank houses years of valuable financial performance data and trends associated with many different loan types, and we look forward to bringing more intelligence to the market and our partners over time,” stated Michael Hilmer, Hank Chairperson and CEO. “We are delighted by the continued growth in revenue and gross margins and look forward to amplifying this growth as we close on the mortgage platform transaction and the many enterprise deals in our funnel.” He added, “From a company valuation perspective, two of the most critical value drivers for SaaS based companies are healthy gross margins and ARR growth rates1 and we tick both of those boxes. With gross margins approaching an industry leading 90%, and predictable healthy growth from our SMB channels, we are well situated to amplify shareholder value through continued organic growth and by layering on enterprise class wins.”
The Company looks forward to reporting its second-quarter financials at the end of May 2022.
1Source: SaaS Capital White Paper “What’s Your SaaS Company Worth?” www.saas-capital.com
About Hank Payments Corp.
Hank is a SaaS based consumer Fintech company. The industry leading Hank cloud-based software platform (the “Hank Platform“) acts as a consumer’s financial budget manager using powerful technology to automate a consumer’s personal cash flow and payments. Through its FDIC (Federal Deposit Insurance Corporation) insured bank partners in the U.S., Hank helps consumers in all 50 States find funds in their existing cash flow and speed up the retirement of liabilities. The Hank Platform instructs its banking partners to debit consumers when they have cash, store the money in FDIC insured accounts, then automatically pay bills and loans as they come due; often sooner than required. Approximately half of Hank’s customers are financially sound and use the Hank Platform for convenience, while the other half improve their payment performance through the Hank Platform. Hank’s customers pay setup and ongoing monthly processing fees while remaining on the Hank Platform for an average of three years. Hank continues to innovate and anticipates launching more expansive state of the art features to its expected growing customer base to provide greater visibility into their cash flow, credit performance, and viability to borrow or refinance at lower rates, including introducing Hank customers to interested lenders.
Forward-Looking Statements
This news release may contain forward-looking statements (within the meaning of applicable securities laws) which 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, without limitation, statements regarding the future success of the Company’s business. Financial performance figures in Canadian Dollars unless otherwise indicated by “U” representing United States Dollars.
The forward-looking statements in this news release are based on certain assumptions, including, without limitation, the Shares beginning trading on the TSXV. The 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. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to publicly update or revise any forward-looking statement, whether because of new information, future events or otherwise.
FOR FURTHER INFORMATION PLEASE CONTACT:
For more information regarding Hank Payments Corp., please contact: Jason Ewart, EVP Capital Markets, at 1-833-HANKPAY. For Investor Relations please contact ir@hankpayments.com 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/120868