Tyro Payments shares surge as gross profit lifts 34% in FY22

Tyro posted full-year earnings today.

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Key points

  • Tyro Payments posted its FY22 earnings today
  • Growth was seen throughout the year and guidance for FY23 signals further company growth
  • In the last 12 months, Tyro shares are down more than 70% 

The Tyro Payments Ltd (ASX: TYR) share price is lifting in late morning trade on Monday following the release of the company's FY22 earnings results.

At the time of writing, the Tyro shares are trading 7.5% higher at $1.075.

Tyro grows payments revenue 39% in FY22

Key takeouts from the company's results include:

  • Payments revenue of $318.8 million, up 39% from $229.2 million in FY21
  • Payments statutory gross profit of $147.7 million, a year-on-year gain of 34%
  • A total of 109,248 terminals reached in FY22, up 4%
  • Merchant loan originations reached $99.1 million, a staggering 283% year-on-year gain
  • Total merchant deposits of $83.3 million at 30 June 2022, up from $75.5 million in June FY21
  • Earnings before interest, tax, depreciation, and amortisation (EBITDA) of $10.7 million vs $14.2 million the same time last year
  • Statutory loss after tax of $29.6 million, slightly down from $29.8 million in FY21
  • Finished FY22 with $123 million in total cash and financial investments

What else happened last period for Tyro?

Tyro says that its collaboration with Bendigo Bank generated over $5.2 billion in transaction value in its first full year of operation.

The company was also appointed as an exclusive partner of Telstra Corporation Ltd (ASX: TLS) offering merchant-acquiring solutions to the telco giant's business customers.

Management has been active on cost management as well, by reducing headcount and increasing its merchant service fee in H2 FY22.

Furthermore, online sales generation accounted for 1.5% of transaction value. This created around $520 million in transactions processed, up from $70 million in FY21.

Management commentary

Speaking on the results sending Tyro shares skywards today, CEO and managing director Robbie Cooke said:

Despite the challenges of 2022 with Covid, tight labour markets, market de-ratings of payment companies and inflationary pressures – we responded strongly with focused cost management, tight margin management, and a continuing focus on serving our customers while delivering new products and services to our merchants.

These actions started to positively contribute in the last quarter of the year and remain a key focus in FY23. They are expected to yield further operating leverage improvements in parallel with our continuing focus on driving strong top line growth and new merchant acquisition.

What's next for Tyro?

The company says it has made a strong start to FY23 already. While transaction values for July lifted 46% year on year to $3.4 billion, August values are also up 70% from FY22 to $2.9 billion.

Tyro forecasts transaction value between $40m billion and $42 billion, stemming normalised gross profit of between $175 million and $185 million.

It is also aiming to be free cash flow positive "on exiting FY23".

Tyro share price snapshot

In the last 12 months, Tyro shares are down 71%.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Tyro Payments. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Tyro Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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