QuickFee : Q3 FY22 business update

ASX Release | 20 April 2022

QuickFee Limited

Q3 FY22 quarterly business update

QuickFee Limited (ASX:QFE) ("QuickFee") today announces a business update for the quarter ended 31 March 2022 (Q3 FY22).

Highlights

Professional services

Q3 FY22

Q3 FY21

Year-on-year movement

Total transaction values (TTV)

US ACH (Pay Now)

US Card (Pay Now)

Total US Pay Now

US$175m US$44m US$219m

US$123m US$29m US$152m

US Financing (Pay Later)

AU Financing (Pay Later)

US$3.3m A$6.6m

+42% +52% +44% +33% +20%

BNPL

Q3 FY22

Q2 FY22

Quarter-on-quarter movement

BNPL total transaction volume - US BNPL total transaction volume - AU Run-rate volume backlog - global Cumulative ISO sign-ups - US Cumulative merchant sign-ups - global

US$1.1m A$0.2m A$8.3m 190 1,441

US$0.6m A$0.2m A$6.1m 136 1241

+83% -%

+36%

+40%

+16%

• • Another quarter of strong growth in the US:

  • • Pay Now total transaction values (TTV) up 44% to US$219 million (Q3 FY21: US$152 million)

  • • Financing up 33% to US$4.4 million (Q3 FY21: US$3.3 million)

  • • March 2022 was an all-time record month for Pay Now and Financing volumes

• • ACH yield has increased to 0.39% in the quarter from 0.34% for H1 FY21 (refer appendix)

• • Continued recovery in lending in Australia, up 20% on pcp to A$7.9 million

• • Strong growth in BNPL go-to-market:

  • • 190 independent sales organisations (ISOs) now signed up (136 at 31 December 2021)

  • • Run-rate volume backlog up 36% to A$8.3 million (A$6.1 million at 31 December 2021); global revenue backlog of A$0.8 million, up 33% on 31 December 2021

• • Completion of proprietary payments platform, providing merchants with a seamless point-of-purchase check out gateway, connected to multiple back-end processors and sponsor banks

• • Key board appointment of seasoned technology and financial services executive, Mike McConnell

• • Results signal QuickFee's accelerated path to profitability, with growth in all revenue drivers and a flagged reduced level of spend on technology

Commenting on the quarter, Eric Lookhoff, QuickFee's CEO said:

"We are delighted to begin realising the investments made over the past 18 months in another very positive quarter of trading. Volume growth was achieved across all drivers of the business in the US and Australia, with a record month of March being achieved in each of our payments and lending products in the US.

The shift to online payments in the US professional services sector and new BNPL merchant signings provide a major tailwind for our business, producing strong growth across our Pay Now payments products and Pay Later financing solutions, up 44% and 33%, respectively over the comparative period.

We were further pleased to announce the completion and launch of QuickFee's proprietary payments platform, QUBE. This is a step change for both QuickFee and its merchants. With QUBE, we now have the foundation to drive scaled unit economics on our payments volume and deliver additional value-added solutions to our merchants.

As we reached this milestone, we will now benefit from higher yields on both ACH and card volume, whilst stepping down redundant operating and technology investments which were needed to establish our present capabilities. Moving forward, we can accelerate gross profit margins and create a stable baseline of operating expenses. This combination accelerates our profitability."

Operational update

Professional services - United States

QuickFee delivered record merchant numbers in its core markets of accounting and legal during both the March 2022 quarter and in FY22 year-to-date. This growth in merchant base drove record total transaction values (TTV), with Pay Now TTV up 44% for the quarter to US$219 million. Despite the March quarter traditionally starting slow, Financing also saw a record quarter of US$4.4 million in lending, up 33% on pcp.

March was an all-time record month in all of the Financing, ACH, and CC products, as the go-to-market strategies launched earlier this financial year are taking effect. With professional services firms underwriting all Financing used by the firms' customers, the credit risk associated with this finance product is minimal.

QuickFee's strategy to continue to grow its market share in the professional services space remains threefold, validated by its performance in Q3 FY22:

• • Increase US market share through further penetration of accounting firm alliances and associations made possible through a return to conference event travel in the US;

• • Increase share of total firm volume through deeper practice management system integrations with the Connect product; and

• • Facilitate and benefit from the industry-wide shift toward digital invoicing and online payments.

US quarterly total transaction volumes and trading metrics

US Financing (US$'M)US active customers (excl. BNPL)US Pay Now (US$'M)US active merchants (excl. BNPL)

Professional services - Australia

Lending in the Australian market has continued to show encouraging growth in the March 2022 quarter, with lending for Q3 FY22 up 20% to A$7.9 million (Q3 FY21: A$6.6 million). Lending for FY22 year-to-date was A$25.3 million, up 27% from pcp.

The March 2022 quarter started slowly with many professional services firms and staff taking extended leave through the summer period. However, active customers for Q3 FY22 were 9,800, up 8% on pcp, while active merchants were up 5% to 388.

Australia quarterly total transaction volumes and trading metrics

AU Financing (A$'M)

AU Pay Now (A$'M)

AU active customers (excl. BNPL)

AU active merchants (excl. BNPL)