iSignthis Ltd (ASX: ISX) has taken the market by storm on the announcement of rapid growth in gross processing transaction volume. A 160% increase in GPTV since June 30, 2019, to highs of A$1.1 billion signals robust growth in the company’s payment processing business. The fact that the company has also achieved positive cash flow status is another development that continues to excite investors.
Robust GPTV Growth
Solid financial results for the first half of the year points to what could turn out to be a record-breaking year. Operating revenue for the first six months of the year topped highs of A$7.5 million representing a $49% increase from A$5 million reported a year ago. Total revenue, on the other hand, was up 48% to A$8.2 million. ISignthis generates revenues by providing payments as well as eMoney and identity verification services.
Revenue growth looks set to continue as business customer approvals were up 28% as of the end of August to 270. The fact that the underwriting team continues to work on a growing pipeline of business customer applications points to yet another record-breaking second half of the year. Merchant services fee also continues to grow at an impressive rate. ISignthis is also projecting robust growth in eMoney and card services.
iSignthis statutory loss after tax was down 75% in the first half of the year to A$0.7 million attributed to robust revenue growth. The company expects its EBIT for the full year to rise to A$10.7 million. Cash balance as of June 30, 2019, stood at A$9.9 million
It awaits to be seen how the operating cost base will affect the bottom line. The company expects costs to rise to A$11 million from A$8.75 million in response to new product initiatives. However, the new product line should allow the company to capture new revenue-generating streams.
Visa Processing Agreement
In addition to impressive financial results depicted by growth in GPTV, iSignthis has entered into an Australian Principal Member licensing agreement. The agreement with Asia Pacific Singapore paves the way for the payments processor to act as a merchant’s card acquiring entity. Conversely, the company will process card payments and make settlements on behalf of merchants.
The agreement provides the company with access to a vast pool of Visa cards from which it is poised to generate significant revenues in terms of processing fees. The fact that the Australian card processing market is valued at over $740 billion presents yet another avenue for the company to expand and strengthen its revenue-generating base.
“The company is pleased to extend its principal member relationship with Visa into multiple regions, including the EEA and Australia. This agreement also paves the way for iSignthis to expand within the Asia Pacific region in due course, through its relationship with the Visa Singapore regional office,” said CEO John Karantzis.
The Visa deal builds on similar agreements that iSignthis has signed to become a Principal member for Mastercard as well as ChinaUnionPay and Discover cards.