Hank Payments Delivers Strong First Quarter; Revenue Grows 25% Year Over Year; Gross Profit Grows to 85%
Toronto, Ontario--(Newsfile Corp. - November 29, 2021) - Hank Payments Corp. (TSXV: HANK) ("Hank" or the "Company"), a North American financial technology company that acts as a consumer's financial concierge, using a powerful technology to automate the complexities of personal cash flow management, announced the filings of its financial statements and management discussion and analysis ("MD&A") for the three months ending September 30, 2021, its last quarter as a private company.
The Company exceeded gross profit materially in the quarter and with the capital raised through its RTO with Nobelium in October, Hank is now aggressively pursuing its growth plans.
Financial and Business Highlights:
- Revenue grew over the same period last year by 25.3% to U$936,866
- Cost of sales increased by only 6.9% over the same period last year to U$136,700
- Gross Profit % grew over the same period last year by 2.5% to 85%
- Cash used in operations reduced to U$36,606 from U$193,240, an 81% improvement
Executing Key Indicators of Performance:
- Hank users managing mortgage payments increased by 22% since the beginning of the pandemic - March 1, 2020
- Hank users managing multiple payments increased by 68% since the beginning of the pandemic and 17% since the beginning of calendar 2021
- Multi payment customers processing fees are up 67% over their original onboarded monthly loan processing fees
- Over 25% of Hank customers, with more than one loan on the platform, have at least one credit card on the platform, signalling a desire to reduce high yield debt
- On average, customers with multiple payments and loans on the platform are using Hank for 2.81 household payments
Despite marginal investment in digital marketing, Hank's marketing team provided strong evidence that the platform's multi-loan and payment management features are highly desired and lucrative. Hank acquires auto loan customers, curates their payments, then, once the customers are used to the platform, Hank re-markets to them over time to add additional payments. The multi-loan consumer lifetime value ("LTV") currently averages above U$1,000, with power users of the platform delivering between U$1,300 and U$1,700 in lifetime value, at industry leading margins. Customers' financial lives are made much easier by running their liability and cash management on the Hank platform.
As Hank closes transactions, the Hank marketing team will leverage Hank's advance platform and digital capabilities to cross-sell both existing and previous customers to curate additional loans. The Company expects that over time, the period that the customers stay on the platform will lengthen materially and as a result, the already strong LTV of those customers should increase in similar fashion to Hanks multi-loan customers.
"I am delighted by these results in the face of double-digit drops in vehicle sales in the USA due to chip shortages. Our auto vertical continues to perform despite industry softness, which analysts now see reversing starting early in 2022, and we are well-positioned to benefit accordingly. Our technology advancements are bearing fruit in the form of more consumers using the platform for multiple payments and we will increase our marketing and technology investments in keeping with internal return models, driven in part by the exceptional statistics we are seeing in this category of customer," commented Michael Hilmer, Chairperson & CEO.
Jeff Guthrie, President & COO of Hank, added, "We are pleased that our resilient platform continues to perform as pressure continues in certain market segments, and we are extremely excited about the transaction pricing and value creation opportunities at our doorstep. This unique and short-term market setup is ideal for us as we look to close on near-term opportunities and benefit from the growth of multiple footprints in many diverse channels across America. I am very pleased with the multi-payment and mortgage customer growth as it signals that we are on point with the consumer needs in the market, and my confidence is very high that these trends will continue to grow as we provide value in the form of financial wellness to consumers."
- The Company completed its qualifying transaction with Nobelium Tech Corp. on October 13, 2021, which included a subscription receipt financing in the amount of C$3.1 million. The proceeds will be allocated to execute Hank's growth strategy and continue building out the Hank platform to create consumer and shareholder value.
A comprehensive discussion of Hank's financial position and results of operations is provided in the financial statements and MD&A for the first quarter period ending September 30, 2021, filed on SEDAR.
Hank also granted a total of 20,000 options at an exercise price of $1.00 and an expiry date of November 29, 2031.
About Hank Payments Corp.
Hank is a financial technology company. The Hank software platform (the "Hank Platform") acts as a consumer's personal, financial concierge using a powerful technology to automate the complexities of personal cash flow management. Through its FDIC (Federal Deposit Insurance Corporation) insured bank partners in the United States, Hank helps consumers in every state find funds in their existing cash flow and speed up the retirement of liabilities. The Hank Platform debits consumers when they have cash, stores the cash with partner banks, then automatically instructs partner banks to pay bills and loans as they come due and 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 use of the Hank Platform. One hundred percent of Hank's customers are in the USA and 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 features to its expected growing customer base that will 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.
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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. A number of 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 Corporation assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
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