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Tyro is Australia’s fifth largest EFTPOS provider serving small-to-medium enterprises (SMEs) with payment solutions. In FY19 (year-end Jun 2019), Tyro processed A$17.5bn worth of transactions for 29,031 merchants. The company mainly earns its revenue by charging the merchants who use its EFTPOS terminals.
Tyro has an uninterrupted track record of strong growth since inception. It also seems to be gaining ground on the big four even though it still has some way to go. Its recent banking foray appears promising and could be a growth driver over the mid to long-term.
It updates for 1Q20 and outlook for FY20 seems to imply that growth is unlikely to slow down in the near term. In addition, the company is also working on a number of other initiatives to keep driving growth.
However, the company’s inability to breakeven after a strong growth run for over a decade is a bit worrisome. At the same time its high churn rate and the lack of details around the same doesn’t help.
Tyro Payments IPO - A lot to like apart from its earnings profile and churn rate
Tyro Payments (Tyro) plans to raise around US$200-300m in its Australia listing. The company is backed by some strong investors including Tiger Global and Mike Cannon-Brookes, who is the co-founder of Atlassian.Tyro is Australia’s fifth largest EFTPOS provider serving small-to-medium enterprises (SMEs) with payment solutions. In FY19 (year-end Jun 2019), Tyro processed A$17.5bn worth of transactions for 29,031 merchants. The company mainly earns its revenue by charging the merchants who use its EFTPOS terminals.
Tyro has an uninterrupted track record of strong growth since inception. It also seems to be gaining ground on the big four even though it still has some way to go. Its recent banking foray appears promising and could be a growth driver over the mid to long-term.
It updates for 1Q20 and outlook for FY20 seems to imply that growth is unlikely to slow down in the near term. In addition, the company is also working on a number of other initiatives to keep driving growth.
However, the company’s inability to breakeven after a strong growth run for over a decade is a bit worrisome. At the same time its high churn rate and the lack of details around the same doesn’t help.
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Aequitas Research
Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.
Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.
Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.
Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Sumeet Singh
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