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Point-of-sale fintech Tyro Payments (ASX: TYR) has boosted its bottom-line more than fourfold to $25.7 million despite transaction volumes almost flatlining, as higher margins and new business initiatives helped drive growth in a challenging market.
Tyro's reported total transaction value edged just 0.8 per cent higher to $42.9 billion for the year, although EBITDA grew 31.6 per cent year-on-year to $55.7 million as group revenue lifted 8.2 per cent to $471.42 million.
The result was aided by a boost in EBITDA margin of 4.5 percentage points to 26.4 per cent, with further margin growth tipped for the current year.
Tyro’s gross profit lifted 9.1 per cent to $210.8 million, driven by a “successful pricing transformation” and a strong uptake of its integrated banking offering, leading to a 27 per cent increase in banking users and a 29.4 per cent increase in banking gross profit.
The group’s health division, established following the $22.5 million acquisition of Medipass in 2021, also saw a 21 per cent increase in transaction volume.
Tyro CEO Jon Davey says FY24 saw the accelerated delivery of “game-changing solutions” for merchants and partners including the Tyro Pro terminal and embedded payments software development kit, which allows its partners to embed the Tyro payments technology into a range of devices.
“We also continued to innovate to bolster our online payments offering for merchants and our broad partner network, which increased by more than 100 active partners this year,” says Davey.
“Merchants can now process payments within the Tyro Merchant Portal and send payment invoice links directly to customers.
“We also enabled card-matching for Australian-first instant cashback app, Hello Clever, and integrated payments for StoreConnect, the first Salesforce-native POS (point of sale) for small businesses.”
Davey says the group’s integrated banking products are integral to its customer value proposition, allowing merchants to “pay and get paid easily”. This was reflected in the 27 per cent lift in Tyro banking users.
Tyro points to further growth for the year ahead after securing an agreement with an as yet undisclosed partner for its health division.
“The solutions that we’ve already built in Tyro Health position us perfectly to provide a seamless solution in this industry,” says Davey.
The company has also signed a partnership agreement with "one of Australia’s largest providers of unattended payments infrastructure for car parking and EV charging".
“We are currently working to integrate Tyro’s payments capability into partner software, and we expect to go live with new merchants in FY25.,” says Davey.
“We remain focused on extending our product offering and continuing to develop valuable innovations for our partners and merchants.”
Davey says these two new verticals will provide a competitive advantage for the group, adding that “with these initiatives in play, we are confident in our runway for growth”.
While Tyro acknowledges challenging conditions for its merchant clients, it is forecasting continued gross profit growth and improved profitability for the year ahead.
The company is expecting gross profit of between $218 million and $226 million in FY25 at an EBITDA margin of about 28 per cent.
Shares in Tyro Payments were trading 15 per cent higher at $1.145 at 11.23am (AEST) following the solid earnings performance.
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