Beforepay : Q4 FY22 Quarterly Activities/Appendix 4C Cash Flow Report

66%

1.2%

N/A

2.0%

N/A

-18%

108%

-56%N/A

2.2% $1.05m

4.1%

($0.30)

1.8% $2.18m

$4.04m

$2.18m

$5.26m

30%

142%

158,269

102,621

173,398

10%

69%

$282

$238

$299

6%

26%

$87.9m

$44.9m

$107.4m

22%

139%

Change %

Change %

Q3 FY22

Q4 FY21

Q4 FY22

QoQ

YoY

Beforepay Q4 FY22 Quarterly Activities and Appendix 4C Cash Flow Report (Unaudited) Beforepay delivers strong growth and significant uplift in net transaction margin in Q4 FY22

Beforepay Group Limited

onlyASX Announcement (ASX: B4P) 28 July 2022

Beforepay Group Limited (Beforepay or the Company) (ASX: B4P) has released its Appendix 4C for the quarter ended 30 June 2022 (Q4 FY22).

Beforepay continues improvement across all key metrics in Q4 FY22. Highlights include:

use	• Strong growth continues with pay advances of $107.4m, up 139% from Q4 FY21 (year-on year or YoY) and
up 22% on Q3 FY22 (Quarter-on-quarter or QoQ).
	• Net transaction loss% 1 declined to 1.8%, down 56% YoY and 18% QoQ, driven by ongoing refinements to
	the risk model, customer limit management, and higher recoveries.
	• Net transaction margin2 (NTM) increased to $2.18m, up from $1.05m or 108% QoQ and up $2.48m from a
	loss of -$0.30m in Q4FY21, with increasing profitability largely driven by improvements in net transaction
personal	loss.
• Continued balance-sheet strength with $28.4m in cash on hand as at 30 June 2022.

Beforepay CEO, Jamie Twiss, said, "Beforepay has delivered another strong quarter, with significant improvements in all key metrics. More than doubling our net transaction margin in a single quarter shows that we are well on track towards profitability."

Overview

Platform metrics

Pay advances

Average pay advance

Active users (no. users)3

ForFinancial metrics

Beforepay income

Net transaction loss % (of pay advances plus fees) Net transaction margin

Net transaction margin % (of pay advances)

• Net transaction loss refers to actual and expected credit losses (net of recoveries). Net transaction loss % is the net transaction loss as a percentage of pay advances plus fees.
  2 Net transaction margin comprises Beforepay income (being Beforepay pay advance fee income) less the variable costs associated with facilitating pay advance transactions (net of recoveries). These variable costs include net transaction loss, third party funding costs, and direct service costs. Net transaction margin is a management metric used to measure the gross margin earned on pay advances. Net transaction loss comprises customer defaults plus current advances provisioned during the period.
  3 Customers of Beforepay who have taken out a pay advance in the previous 12 months from the relevant date. This includes customers who have not yet repaid their most recent cash out and are not eligible to re-borrow until they have done so.

ACN 633 925 505

Suite 2, Level 6, 50 Carrington Street, Sydney NSW 2000

Net transaction margin by quarter

only
use
			Q4 FY22	4		Q3 FY22			Change
	Balance sheet
	Cash position	$28,367,245		$35,225,230		$(6,857,985)
	Equity position	$32,661,476		$36,575,099		$(3,913,623)
	Financial performance
personal	● Pay advances grew by 139% YoY driven by both new customer acquisition and continued usage by
FY22).
		existing customers.
		● Active users grew by 69% YoY to 173,398 and up 10% on Q3 FY22 (158,269).
		● Beforepay income increased by 142% YoY to $5.26m during Q4 FY22 and up 30% on Q3 FY22 ($4.04m).
		● Net transaction loss % improved to 1.8%, down 56% YoY and down 18% QoQ driven by ongoing
		refinements to the risk model, customer limit management and higher recoveries during Q4 FY22.
		Management aims to maintain net transaction losses (defaults) around this level as we balance
		opportunities to accelerate growth.
		● Direct service costs as a percentage of pay advances reduced to 0.4% in Q4 FY22 (previously 0.5% in Q3
For	● Net transaction margin % increased to 2.0% compared to 1.2% of pay advances in Q3 FY22 driven

primarily by lower net transaction losses as well as timing effects in revenue recognition.

● Total operating expenses (excluding one off and/or significant items) were $5.98m in Q4 FY22, which declined 7% or $0.42m QoQ. Within these numbers, advertising and marketing expense attributable to customer acquisition was $2.71m in Q4 FY22 or 19.5% lower than Q3 FY22, ($3.37m) primarily driven by the timing of above-the-line advertising spend. Employee, general and administration and other costs were $3.29m in Q4 FY22 or 8.5% higher than Q3 FY22 ($3.03m) related primarily to higher employment and recruitment costs during the quarter.

● EBITDA (excluding one-off and/or significant items) was ($3.24m), a 34% improvement on the EBITDA loss of ($4.89m) in Q3 FY22.

● Month to date trading for July 2022 is slower than recent months, consistent with expected seasonal variations.

• Cash position as at 30 June 2022 represents all statutory cash and cash equivalents (including held by third parties).

ACN 633 925 505

Suite 2, Level 6, 50 Carrington Street, Sydney NSW 2000

Balance sheet

only	● Cash on hand as at Q4 FY22 was $28.4m. This compares to the cash on hand of $35.2m at Q3 FY22,
reflecting growth in customer pay advances during the quarter.
	● As at Q4 FY22, Beforepay had drawn $20.7m under its third-party debt facility, up from $15.7m in Q3
	FY22 to fund the growth in pay advances. The third-party debt facility has a capacity which increases to
	$45m by December 2023 and expires in January 2024 following the 7-month extension by AMAL Trustees
	Pty Ltd (ACN 609 737 064) as trustee for the Longreach Direct Lending Fund (Longreach), announced on
	the 28 June 2022.
use	● Beforepay had a total equity position of $32.6m as at Q4 FY22. This compares to $36.6m at Q3 FY22.
● Beforepay retains a highly capital efficient model with an average pay advance duration5 of approximately
20-25 days. As a result, the third-party funding cost of the average pay advance6 is c. 0.52% of the amount
advanced, based on a 20-day loan duration. A 1% increase in interest rate would increase this to
approximately 0.56%.
Growth strategy
personal	● Beforepay's growth strategy through new customer acquisition and customer retention remains
unchanged. The momentum of growth in both revenue and user numbers combined with an
improvement in net transaction margin demonstrate that the Company is successfully executing on its
strategy.
● The Company remains focused on continuing to grow without adding significant cost to the current
operating expense base.
● Beforepay will continue to explore international expansion opportunities, however, maintains a current
focus on its path to profitability by managing costs and delivering on growth domestically. The timing of
any international expansion will be reviewed by the Board accordingly.
Our business
	● Beforepay remains committed to providing its product in an ethical, customer-friendly way to help
For	working Australians manage temporary cash-flow challenges.
● Our product advances people small sums of money over short periods of time, which helps them get
through short-term challenges whilst not living beyond their means. Beforepay makes ongoing
enhancements to customers' eligibility criteria and risk assessments.
● Our fee model is simple, transparent, and inexpensive, and gives our customers total control, charging
only a small transaction fee, zero interest, and never any late fees.
● Average pay advances are small (with an increase to an average of ~$299 in Q4 FY22), and if a customer

does not pay back within the required time, the only penalty is that the service is suspended.

● Beforepay service remains well regarded by customers, with an average 4.8-star rating (out of 5) across the Google Play Store and Apple App Store.

• The average time required across all pay advances in a period to fully repay the pay advance. Pay advances which default and remain unsettled are removed.
  6 The total dollar value of pay advances in a period divided by the number of pay advances in that period.

ACN 633 925 505

Suite 2, Level 6, 50 Carrington Street, Sydney NSW 2000

• In other quarterly updates, Beforepay's Chief Marketing Officer Chris Richardson will step down in August 2022.

Appendix 1: Use of Funds

Pursuant to Listing Rule 4.7C.2, the Company confirms that, in the months since listing on the ASX, it has incurred expenditure largely in line with the Use of Proceeds set out in its Replacement Prospectus dated 29 November 2021, as detailed below. The Company is well funded to achieve its strategic objectives and planned activities.

only	Intended Use of Funds	Replacement	Actual		Commentary
$m	Prospectus	Spend
		Since IPO
use			(Jan-Jun
		2022)
Funding increase in	$5.9m		$1.1m		Funding the growth in the equity funded
cash outs					portion of the loan book
	$16.9m		$6.1m		Direct digital customer acquisition and
personal		Marketing and
	customer acquisition					above the line marketing costs to further
						increase brand awareness
	Overseas expansion	$7.6m		$0.3m		Costs in exploring opportunities for future
	focused on the US					growth expansion in the US
	Costs related to the	$4.6m		$4.7m		Advisor fees (legal, compliance, tax and
	IPO offer					accounting advisors) under the Underwriting
						Agreement, ASX listing costs and Prospectus
						insurance.
	Total	$35.0m		$12.2m
	standard terms.

In accordance with Listing Rule 4.7C, payments made to related parties and their associates included in item 6.1 of the Appendix 4C was A$253,000 that comprised of payments made to Executive and Non-Executive Directors relating to salary and wages, (inclusive of superannuation and applicable taxes withheld) and Director fees on

For
		This announcement has been authorised for release to the ASX by the Board.
		or more information, please contact:
		Investors	Media
		Andrew Keys	Nathan Motton
		Investor Relations, Beforepay	Communications Lead, Beforepay
		Ph: 0400 400 380	Ph: 0447 771 882
		[e-mail]	[e-mail]

ACN 633 925 505

Suite 2, Level 6, 50 Carrington Street, Sydney NSW 2000

About Beforepay

Beforepay was founded in 2019 to support working Australians who have not been well-served by the traditional financial- onlyservices industry. The product is an ethical, customer-friendly way to help people manage temporary cash-flow challenges.

We provide our customers with early access to a portion of their pay, on-demand, in exchange for a single fixed fee, which helps them to get through short-term challenges whilst not living beyond their means. For more information visit www.beforepay.com.au.

Important notice

This announcement contains selected summary information only and is provided for general information purposes only. It should be read in conjunction with Beforepay's continuous disclosure announcements available at www.beforepay.com.au/investor-hub/asx-

useannouncements. Nothing in this announcement constitutes financial product, investment, legal, tax, accounting or other advice and it is not to be relied upon in substitution for the recipient's own exercise of independent judgment regarding the operations, financial condition and prospects of the Beforepay Group. Before making an investment decision, the recipient should consider its own financial situation, objectives and needs, and conduct its own independent investigation and assessment of the contents of this announcement, including obtaining investment, legal, tax, accounting and such other advice as it considers necessary or appropriate.

This announcement has been prepared without taking account of any person's individual investment objectives, financial situation or

particular needs. The information in this announcement has been obtained from and based on sources believed by Beforepay to be personalreliable. To the maximum extent permitted by law, no member of the Beforepay Group make a representation or warranty, express or

implied, as to the accuracy, completeness, timeliness or reliability of the contents of this announcement. To the maximum extent permitted by law, no member of the Beforepay Group accepts any liability (including, without limitation, any liability arising from fault or egligence) for any loss whatsoever arising from the use of this announcement or its contents or otherwise arising in connection with it.

This announcement may contain forward-looking statements, guidance, forecasts, estimates, prospects, projections or statements in relation to future matters ('Forward Statements'). Forward Statements can generally be identified by the use of forward looking words such as "anticipate", "estimates", "will", "should", "could", "may", "expects", "plans", "forecast", "target" or similar expressions. Forward Statements including indications, guidance or outlook on future revenues, distributions or financial position and performance or return or growth in underlying investments are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. No independent third party has reviewed the reasonableness of any such statements or assumptions. No member of the Beforepay Group represents or warrants that such Forward Statements will be achieved or will prove to be correct or gives any warranty, express or implied, as to the accuracy, completeness, likelihood of achievement or reasonableness of any Forward Statement contained in this presentation. Except as required by law or regulation, Beforepay assumes no obligation to release updates or revisions to Forward Statements to reflect any changes. This announcement includes information regarding past performance of Beforepay and investors should be aware that past performance is not and should not be relied upon as being indicative of future performance.

Investors should note that certain financial data included in this announcement is not recognised under the Australian Accounting ForStandards and is classified as 'non-IFRS financial information' under ASIC Regulatory Guide 230 'Disclosing non-IFRS financial information'

('RG 230'). Beforepay considers that non-IFRS information provides useful information to users in measuring the financial performance and position of the Beforepay. The non-IFRS financial measures do not have standardized meanings under Australian Accounting Standards and therefore may not be comparable to similarly titled measures determined in accordance with Australian Accounting Standards. Readers are cautioned therefore not to place undue reliance on any non-IFRS financial information and ratios in this announcement. All dollar values are in Australian dollars ($ or A$) unless stated otherwise. All figures are unaudited. Change percentages are calculated using unrounded figures and may differ slightly from a number calculated using rounded figures.

ACN 633 925 505

Suite 2, Level 6, 50 Carrington Street, Sydney NSW 2000