VersaPay grows revenue by 65% year-over-year in Q1 2010
TORONTO---VersaPay Corporation, a provider of merchant credit, debit, gift and loyalty card payment processing solutions, today announced its financial and operational results for the three-month period ended March 31, 2010. All amounts are reported in Canadian dollars unless otherwise stated.
Q1 2010 Operational Highlights
- Increased total gross transaction value processed 83% to
$132 million from $72 million in Q1 2009
- Monthly gross transaction value processed was $58 million for
- Listed on the TSX Venture Exchange
- Completed $3.5 million equity financing
- Signed partnership agreement with the Business Improvements Areas
of British Columbia
- Subsequent to quarter end, entered into agreement to sell 75%
ownership position in Positive Inc.
"The growth in our merchant customer base drove strong improvements in our Q1 top line results, in particular our recurring revenue, which was up 72% compared to last year," said Bill McGill, Acting CEO of VersaPay. "In the quarter, we continued to successfully leverage our partnership with the Association of Canadian Travel Agencies, increasing our penetration of the travel industry with new customer wins. In addition, we further invested in the business, expanding our sales team, enhancing our technology and building partnerships to better enable us to execute on our long-term growth strategies."
Mr. McGill continued: "We are confident in our ability to continue to expand our merchant customer base through our direct sales efforts and channel partnerships. We believe the depth and expertise of our team in combination with our competitively priced, customizable, end-to-end, onsite and online payment processing solutions, position us to successfully capitalize on the growth opportunities in front of us."
Q1 2010 Financial Review
Total revenue for Q1 2010 was $2.6 million, which was a 67% increase from total revenue of $1.6 million in Q1 2009. The year-over-year improvement in VersaPay's top line was driven primarily by growth in the Company's transaction processing fees, which were $2.4 million, up from $1.4 million in Q1 2009 as a result of the Company's success in continuing to expand its merchant customer base. Q1 2010 revenue from product sales and other (primarily comprised of point-of-sale device revenue) was $0.1 million, and revenue from VersaCard and VersaEFT fees was $0.04 million. This is compared to Q1 2009 revenue from product sales and other and revenue from VersaCard and VersaEFT fees of $0.1 million and $0.06 million, respectively. Recurring revenue (defined as Transaction processing fees + VersaCard/EFT fees) for Q1 2010 was $2.5 million, or 94% of total revenue, compared to Q1 2009 recurring revenue of $1.5 million, or 92% of total revenue.
Total expenses for Q1 2010 were $3.5 million, compared to $1.7 million in Q1 2009. The year-over-year increase predominantly reflects the Company's investment in the business to establish the necessary infrastructure in terms of sales staff, marketing, partnerships, technology and cross-Canada reach to support its long-term growth. In addition, the Company's costs of service and costs of products sold increased compared to last year, as a result of growth in number of merchant customers VersaPay is serving.
Adjusted EBITDA for Q1 2010, was $(0.5) million, compared to $(0.1) million in Q1 2009, reflecting VersaPay's increased investment in the business, which was partially offset by the Company's revenue growth. Net income for Q1 2010 was $(0.8) million or $(0.08) per share, compared to $(0.1) million or $(0.26) per share.
As at March 31, 2010, VersaPay had cash and cash equivalents of $1.4 million, an increase from $0.2 million as at December 31, 2009. This primarily reflects the $2.8 million in net proceeds VersaPay generated from the equity financing the Company completed in Q1 2010, which was offset, in part, by cash used in operating activities for the quarter of $1.3 million and cash used in investing activities of $0.1 million.
VersaPay's financial technology enables businesses and consumers across Canada to accept and process credit, debit and gift card transactions. As a payment services and financial technology company serving more than 2,500 Canadian businesses, VersaPay, in conjunction with its partners, provides the hardware, technology, infrastructure and support services that businesses of all types require to accept and process electronic payments from their consumers and clients.
While its core business is payment processing services, VersaPay also provides enhanced financial technology solutions such as VersaEFT - the Company's proprietary Electronic Bill Presentment and Payment solution - which enables merchants and consumers to easily transact with one another.
The Company was recognized by PROFIT Magazine as Canada's Top Emerging Growth Company and was ranked Number 1 in Canada on the 2009 HOT 50 List. VersaPay is headquartered in Vancouver, Canada and has operations in Toronto and Montreal.