Record revenue for Rent.com.au as payments platform reaches $250m milestone

Record revenue for Rent.com.au as payments platform reaches $250m milestone

Perth-based property rental platform Rent.com.au (ASX: RNT) has seen a steady rise in its share of recurring revenue in a record quarter for the group, with more customers signing up to its payments platform RentPay which has now processed $250 million since its relaunch at the start of 2022.

The group, which counts Brisbane entrepreneur Bevan Slattery as its largest shareholder with close to 13 per cent, notes growth is accelerating with the recent $100 million in processed rent coming twice as quickly as the previous $100 million.

Rent.com.au CEO Greg Bader, who owns almost 4 per cent of the company, says the RentPay two-way marketplace is key to the future growth of the group.

"It provides an annuity style revenue stream that helps insulate us from seasonality or market fluctuations within our traditional renter product and advertising sales revenue streams," says Bader.

"Importantly, it allows us to serve renters beyond just the 'movers' market and address the entire renting population that makes up 32 per cent of our country.

"Achieving this milestone of a quarter of a billion dollars in rent payments is of course rewarding for our team, but it's really down to the growing support of our renter and our agency customers. More scale enables more features and services, which in turn amplifies value back to our customers."

More than 8,900 renters are now using RentPay with another 4,000 preparing for onboarding, contributing to annuity revenue's percentage of the total going from 9 per cent in the March quarter of 2023 to 16 per cent in the recent three-month period.

"The importance to the Rent.com.au group of building an annuity revenue stream via RentPay cannot be understated. Every year we experience the impact on our search portal revenue from the ebbs and flows of seasonality across the various quarters, on top of broader market swings," says Bader.

"We've gone from 100 per cent of our revenue being transactional, in other words non-recurring, to now seeing more and more of it being annuity or recurring revenue.

"Q3 FY24 was a record revenue quarter for the group, with strong renter product and advertising sales revenues, yet the compounding nature of RentPay's revenue meant that the share of group revenue that came from recurring revenue still increased."

As announced last week, quarterly revenue rose 41 per cent year-on-year to $890,000, the bulk of which still came from the Rent.com.au website itself. The group had net operational cash outflows of $392,000, and $873,000 over the nine months, with just $1.139 million in cash remaining by the end of March.

Last month the company announced additional payment options to cater to the expats, new migrants and foreign students who represent a significant proportion of Australian renters, teaming up with Novatti Group (ASX: NOV) to provide AliPay, WeChat Pay and UnionPay options for RentPay customers.

"We are the first in the market to offer some of the most popular international payment platforms to our customers," Bader says, noting this allows the company to help both tenants and agencies take on the payments 'arms race'.

"These platforms are deep ecosystems so now our renters, be they expats, students or recent migrants, can pay their rent in Australia by using the tools they're familiar with and continue using to maintain their ties to overseas family and friends whilst in Australia."

Bader adds that general awareness of RentPay is increasing, and the current pipeline of tenants matches the group's entire 2023 calendar year growth despite a recent pause in the bulk migration of rent rolls by agencies due to it being peak moving time and therefore incredibly busy.

"Renters are wanting payment choice, rewards and flexibility. In a tight market you could expect agencies to simply take a 'my way or the highway' approach to tenant requests but we are finding the opposite," he says.

"Smart agencies know the cost of living pressures impact us all and they are actively looking for opportunities to make life easier for their tenants while saving time and dollars for themselves.

"Recent conferences and industry partnerships continue to generate interest and sales momentum, so we are well placed to deliver on our growth ambitions."

RNT shares rose 12.12 per cent today to 3.7 cents per share, implying a market capitalisation of $25.63 million.

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