The company is now well-placed to leverage the positive macro tailwinds forming behind the global payments market.

For fintech payments platform Novatti (ASX:NOV), FY21 marked a transformational year as the company executed on its multi-channel business strategy.

NOV confirmed that step-change this morning as it announced record quarterly revenues of $4.9m.

Annual revenue also climbed to a record high of $16.4m, a gain of around 50% from the prior year.

“Novatti has now grown its annual sales revenue by an average of 45% each year for the past three years, highlighting our ability to deliver consistent, long-term results,” CEO Peter Cook said.

And with the recent completion of its marquee $40m capital raise, the company now has the balance sheet strength and operational leverage to drive further growth in the years ahead.

 

Long-term success

Commenting on the results, Cook said the momentum in FY21 was the result of a multi-year strategy focused around building out Novatti’s payment ecosystem.

Over the course of the past year, the company announced partnerships with global payment leaders including Apple Pay, Google Pay, Samsung Pay, and UnionPay.

The company holds an Australian Financial Services Licence (AFSL) in the domestic market, and was recently selected by payments leaders Afterpay (ASX:APT) to collaborate on a prepaid Visa program in New Zealand.

“This is a model that Novatti believes it can replicate in other jurisdictions, unlocking new addressable markets,” Cook said.

Work is now underway to obtain similar licences for the European Union and Singapore, where Novatti will look to leverage its existing footprint to capture more addressable markets.

The company has also applied for an Australian restricted banking licence with APRA.

After the regulatory approval process was delayed due to the pandemic, Novatti is now “seeking to achieve regulatory approval for this new business before the end of November 2021”, the company said.

It all adds up to a broad-based platform for growth. And Novatti is now seeing the benefits of that work come to fruition as other companies seek it out as a platform partner to drive their own growth channels.

“After spending the past years developing Novatti’s ecosystem, the shift to monetising this ecosystem continues to accelerate,” Cook said.

Along with its Afterpay partnership, the company has been approached by other fintech companies such as Lifepay and LITT that are “seeking to leverage this ecosystem”, he added.

The strategy has gained traction with investors, with shares in Novatti up by around 100% since the start of the year.

Cash receipts for the quarter came in at $10.54m, and the company saw an $800,000 reduction in net operating outflows to $1.1m.

Along with the recent acquisition of its 19.9% stake in listed accounting software company Reckon (ASX:RKN) and with billing subsidiary Emersion now launched in the US, the company is now well-placed to take advantage of the positive macro forces in the multi-billion dollar payments market.

Entering FY22, Novatti will “continue to leverage these strong macro forces and, with the funds from its recent capital raising, expand its growth strategy to increase its presence in existing markets, enter new markets, and pursue a range of acquisition opportunities”, the company said.

This article was developed in collaboration with Novatti, a Stockhead advertiser at the time of publishing.

 This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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