Quickfee Ltd. · ASX:QFE
Quickfee — Investor Presentation (March 2024)
73 slides from Quickfee's investor presentation, Mar 21, 2024
Slide 1: Unlocking Transformational Growth in the US
UNLOCKING TRANSFORMATIONAL GROWTH IN THE US QUICKFEE INVESTOR WEBINAR 21 March, 2024
Slide 2: Welcome
WELCOME Dale Smorgon, Non-executive Chair
Slide 3: Jennifer Warawa, President – North America
Jennifer Warawa, President – North America
Slide 4: Unlocking transformational growth in the US
Unlocking transformational growth in the US QuickFee Investor Webinar 2024 Jennifer Warawa – President, North America + Unlocking transformational growth in the US + Understanding the US market Chris Smith – Head of Growth & Customer Success + Commercial strategy Kathleen Grant – Head of Product Man
Slide 5: Strong foundation for transformational growth
Strong foundation for transformational growth Serving 1,250 Firms A$500M in Payment $1.2B US Pay Now Highly Engaged and Worldwide Plans Funded Volume in FY23 Motivated Team Globally (53 eNPS) US Finance Revenue (US$000) Avg Annual Revenue Per New US Firm (US$M) 1730 10.2 1063 1140 942 5.9 5.6 638 33
Slide 6: Experienced management + leadership team
Experienced management + leadership team Highlights + 30+ years QuickFee experience. + Over 175 years of experience in the Jennifer Warawa Simon Yeandle Bruce Coombes accounting President, North America Chief Financial Officer Founder and Managing Director, AU profession. + Three members of our lead
Slide 7: Engaged Board aligned with growth aspirations
Engaged Board aligned with growth aspirations Highlights + QuickFee Board owns 20%+ of QuickFee shares and are personally invested in the success of the company. + Our Founder is still Dale Smorgon Bruce Coombes Mike McConnell Simon Yeandle on the Board and Non-Executive Chairman Executive Director
Slide 8: Market Context
MARKET CONTEXT
Slide 9: Addressing market problems in the accounting profession
Addressing market problems in the accounting profession Pricing and competitive Cheques are still Accounts Receivable fee pressures are high prevalent in the US runs high and long market The #1 challenge cited by Firms tell us their clients firms is pricing / 56% of accounting firms pay in an averag
Slide 10: Navigating the early days of a seismic change
Navigating the early days of a seismic change 56% of firms have automated 22% Drop in the percentage of 61% of firms feel technology is 9% Only 9% of firms believe client document CPA firms getting more helping in improving they are maximising the collection1 than half of all payments chargeable hou
Slide 11: Our Target US Customers + Solutions
OUR TARGET US CUSTOMERS + SOLUTIONS
Slide 12: Sizing the US accounting services market opportunity
Sizing the US accounting services market opportunity TAM $ 102B > $1M firms SAM $ 84B Firms Servicing B2B Customers (83%) QuickFee Current $10B | $ 1.2B Firms Current accounting firm revenue (9% share of SAM) | Portfolio Transaction volume using QuickFee (12% of rev) www.quickfee.com 21 March, 2024
Slide 13: Capturing market opportunities in US accounting services
Capturing market opportunities in US accounting services 757 CPA FIRMS Active US US FIRM REVENUE CPA FIRMS | Rev. (%) Number (%) Firms in H1 FY24 Big 4 4 $29B (20%) Firms $25M+ 227 (0.3%) $50B (35%) QuickFee TAM Firms $5M-$25M 803 (0.9%) $12B (8%) 6,155 Firms (7%) $102B (71%) Firms $2-5M 1,677 (1.9%
Slide 14: Engaging our US target customers
Engaging our US target customers Focus segment: The legal opportunity + Professional services with a business-to-business (B2B) focused client base. Primary verticals: + Accounting and Legal, or solution providers to accounting or legal (for example: accounting software or CPA State Society). Second
Slide 15: Unique product and payments portfolio
Unique product and payments portfolio Our customers benefit from increased revenue, improved cashflow, reduction in accounts receivable, improved operational efficiency and reduced cost base. Pay Now | ACH/EFT + Card + Traditional digital payment methods. Pay Over Time | Finance + Invoice and fee fi
Slide 16: Delivering benefits for firms and their clients
Delivering benefits for firms and their clients Our customers benefit from increased revenue, improved cashflow, reduction in accounts receivable, improved operational efficiency and reduced cost base. SOLUTION FIRM BENEFITS CLIENT BENEFITS How we solve market (QuickFee Customer) (Firms’ Customer) p
Slide 17: Competitive Landscape
COMPETITIVE LANDSCAPE
Slide 18: Winning with a unique customer value proposition
Winning with a unique customer value proposition Traditional ACH and Other ‘Pay Over Other A/R card processors Time’ Finance automation Designed specifically for professional providers platforms service firms. No integration with practice management Consumer focused, low Only serve top tier, very No
Slide 19: Unlocking Transformational Growth in the US
UNLOCKING TRANSFORMATIONAL GROWTH IN THE US
Slide 20: US revenue share expected to continue increasing over time
US revenue share expected to continue increasing over time FY19 FY23 21% Finance TTV A$M 40% US has grown to 40% of group lending volume 60% 79% 26% Total revenue A$M 41% US is now 59% of 59% group revenue 74% FY19: A$5.8M FY23: A$14.8M AU US AU US www.quickfee.com 21 March, 2024 20
Slide 21: Unlocking transformational growth in the US
Unlocking transformational growth in the US Drive Cost Effective Growth QuickFee Finance Through Automation Revenue yields on the Finance Leverage automation across all product are approximately 25x functional areas to ensure we are those of Pay Now. driving growth in the most efficient, cost-effect
Slide 22: Focus drives performance | QuickFee Finance
Focus drives performance | QuickFee Finance H1 FY24 Key Highlights + Renewed internal focus and sales incentives is driving strong performance + Finance has 25x higher revenue yield than Pay Now www.quickfee.com 21 March, 2024 22
Slide 23: Chris Smith, Head of Sales + Customer Success
Chris Smith, Head of Sales + Customer Success
Slide 24: Commercial Strategy
COMMERCIAL STRATEGY
Slide 25: Unlocking transformational growth in the US
Unlocking transformational growth in the US Drive Cost Effective Growth QuickFee Finance Through Automation Revenue yields on the Finance Leverage automation across all product are approximately 25x functional areas to ensure we are those of Pay Now. driving growth in the most efficient, cost-effect
Slide 26: Keys to delivering transformational growth
Keys to delivering transformational growth Being the accountant segment market 1 leader for automating the bill-to-cash workflow for firms over $1M in revenue 2 Expanding strategically and efficiently through partnerships and alliances 3 Creating a scalable commercial foundation that can 10X our rev
Slide 27: Broad coverage of the US accountant segment market
Broad coverage of the US accountant segment market Annual US Firm Revenue IPA Top 100 50M+ Aiwyn IPA Top 200 25M+ IPA Top 300 20M+ QuickFee IPA Top 400 10M+ IPA Top 500 5M+ 7,000 firms 1M+ 100,000 firms 0M+ CPA Charge Ignition www.quickfee.com 21 March, 2024 27
Slide 28: Leading the accountant market segment with differentiated value
Leading the accountant market segment with differentiated value QuickFee is the leading B2B payments and automated bill-to-cash workflow solution that can help an accounting firm increase revenue, decrease costs, all while improving client and employee experience. New Firm Signups with Win more busi
Slide 29: Unlocking revenue for our customers
Unlocking revenue for our customers Increasing Client Spend CASE STUDY: Nicholas S. Libock, with QuickFee Finance LIBOCK & ASSOCIATES, LLC Managing Member Challenge Solution Results Libock & Associates, LLC is a full-service QuickFee Finance allows firms to offer 3, 6, 9, or Through QuickFee, Libock
Slide 30: Accelerating growth through partnerships and alliances
Accelerating growth through partnerships and alliances Three key objectives: TODAY IDEAL TARGET Elevate our strong collaborative Industry alliances, societies, and influencers that are advocates of 1 relationships with industry players to digital transformation. shape an impactful and profitable ref
Slide 31: Empowering and scaling partnerships: BDO Alliance USA
Empowering and scaling partnerships: A look into BDO Alliance USA Maximising the Strong runway relationship for growth BDO Alliance US is among the QuickFee has been an 8-year Annual sponsor of BDO New firm acquisition: 150+ industry’s largest member of the BDO Alliance Evolve that includes a firms
Slide 32: Progressing our IRIS partnership
Progressing our IRIS partnership Maximising the Strong runway relationship for growth IRIS is a global provider of QuickFee and IRIS entered QuickFee is a first-time Gold New firm acquisition: 500+ practice management, into a joint partnership late sponsor of the IRIS User firms that are not current
Slide 33: Leveraging a scalable commercial foundation
Leveraging a scalable commercial foundation “Results don’t fail us, systems do.” QuickFee has built a commercial foundation that enhances performance every step of the way. Optimised reporting Streamlined rules of Aligned performance Enhanced sales Elevated customer structure engagement incentives t
Slide 34: Transforming our commercial tech stack
Transforming our commercial tech stack QuickFee commercial tech stack February 2023 Core Commercial Tech Sales Intelligence Sales Acceleration Sales Productivity Customer Success Sales Analytics The base foundation of The set of tools you can Tools that move buyers Tools that makes sales Tools that
Slide 35: Transformed our commercial tech stack
Transformed our commercial tech stack QuickFee commercial tech stack March 2024 Core Commercial Tech Sales Intelligence Sales Acceleration Sales Productivity Customer Success Sales Analytics The base foundation of The set of tools you can Tools that move buyers Tools that makes sales Tools that acce
Slide 36: Building momentum: early results/green shoots
Building momentum: early results/green shoots PRODUCTIVITY GREEN SHOOTS FINANCE GREEN SHOOTS CONNECT GREEN SHOOTS 35.4K personalised emails 30% growth rate in trailing 73 Connect signups from sent from sales and customer twelve-month (TTM) average accounting firms that success team monthly Finance v
Slide 37: Kathleen Grant, Head of Product Management
Kathleen Grant, Head of Product Management
Slide 38: Unlocking transformational growth in the US
Unlocking transformational growth in the US Drive Cost Effective Growth QuickFee Finance Through Automation Revenue yields on the Finance Leverage automation across all product are approximately 25x functional areas to ensure we are those of Pay Now. driving growth in the most efficient, cost-effect
Slide 39: Differentiated product strategy – major initiatives
Differentiated product strategy – major initiatives 1 Modernising our customer’s tech stack 2 Optimising the entire bill-to-cash workflow 3 Expanding our ability to capture more share of our customers’ payments www.quickfee.com 21 March, 2024 39
Slide 40: Seizing US market opportunities with Connect
Seizing US market opportunities with Connect Connect integrates with leading US practice management systems Current Why Connect? integrations address 90% Automation of Additional revenue for Firms that adopt of firms in workflow saves time for QuickFee in card, ACH Connect have seen 40% TAM firms an
Slide 41: Modernising our customer's tech stack
Modernising our customer’s tech stack Market problem: 90% of firms use practice management solutions that have been in the market for over 20 years. Those firms need the ability to leverage automation and efficiencies that are delivered through technology. We help them do that. Key callouts: + There
Slide 42: Optimising the entire bill-to-cash workflow
Optimising the entire bill-to-cash workflow Drive efficiency in the accountant's workflow starting with bill to cash helping them accelerate accounts receivables Automation Efficiencies Integration Automation of critical admin tasks such Modernise solutions providing intuitive Expand workflow beyond
Slide 43: Expanding our ability to capture more share of our customers' payments
Expanding our ability to capture more share of our customers’ payments Unlocking new capabilities to capture firm revenue $10B Current capabilities Solution Status Description Connect Live Automated e-invoicing and settlements Total firm revenue of Bank Direct Live Captures payments made through ban
Slide 44: Dave Moore, Chief Technology Officer
Dave Moore, Chief Technology Officer
Slide 45: Technology
TECHNOLOGY
Slide 46: Development's role in our growth flywheel
Development’s role in our growth flywheel Drive Cost Effective Growth QuickFee Finance Through Automation Revenue yields on the Finance Leverage automation across all product are approximately 25x functional areas to ensure we are those of Pay Now. driving growth in the most efficient, cost-effectiv
Slide 47: Keys to delivering transformational growth
Keys to delivering transformational growth Our focus on transformational growth has fueled our innovation, accelerated our development cycle and heightened our competitive edge in the marketplace Customer Focused Rapid Delivery and Scale Secure Systems Tech Empowerment Deliver best-in-class Rapid de
Slide 48: Product development centered on customer needs
Product development centered on customer needs Deliver best-in-class Voice of Better user Customer in Dev experience solutions by Cycle Customer New UI for continuous customer focus groups payment portal engagement and Higher Quality Faster issue feedback – voice of Solutions resolution 200+ hours o
Slide 49: Accelerating delivery and building for scale
Accelerating delivery and building for scale Delivery timelines Engineering processes Scale 25% reduction in Developed and implemented new Technical Design Architecting our applications Documents (TDD) process with growth in mind release cadence Created core pillars that must be adhered to during Sc
Slide 50: Protecting systems and data
Protecting systems and data There are two types of companies - those who take security seriously and those who eventually will. Security Monitoring Disaster Recovery Compliance Reduced critical security Implemented market Created disaster recovery Created technology bill of vulnerabilities to zero.
Slide 51: Strengthening our value through tech empowerment
Strengthening our value through tech empowerment By investing intelligently to own more of our technology, we are committing to a long-term vision for QuickFee that demonstrates to our customers, employees, and investors that we are dedicated to innovation and growth and are not just reliant on exte
Slide 52: Australia Market
AUSTRALIA MARKET
Slide 53: Australia – long established and profitable
Australia – long established and profitable The total AU accounting and legal market is ~AU$57B, which includes QuickFee firms larger and smaller than QuickFee’s target market. QuickFee has AU $100m historically not focused on the smaller firms in this group. TTV $300m QuickFee estimates AU $400m is
Slide 54: Simon Yeandle, Chief Financial Officer
Simon Yeandle, Chief Financial Officer
Slide 55: Approaching Profitability
APPROACHING PROFITABILITY
Slide 56: How we make money
How we make money Revenue QuickFee US QuickFee AU source H1 FY24 H1 FY24 Pricing Pricing Revenue yield Revenue yield Finance: fee funding Up to 12.95% Up to 12.95% Client 8.9% (US$1.9m) (interest revenue) flat fee flat fee 14.2% (A$3.5m) Finance: Approx. 20%+ Firm disbursement funding APR Up to 0.5%
Slide 57: On the path to profitability
On the path to profitability Path to profitability 9.3 + Track record of revenue growth 7.9 6.9 6.1 5.7 4.7 4.9 4.5 4.3 4.2 4.5 + Track record of gross profit growth 3.2 3.1 3.4 + Cost base stable -2.6 -2.7 -2.7 -3.7 + Year-on-year EBTDA growth -5.2 -5.5 expected to continue for H2 FY24 -7.1 H1 FY21
Slide 58: Stabilised cost base
Stabilised cost base Operating expenses (A$M) Underlying operating expenses 10.5 9.7 0.5* reduced in H1 FY24 vs H1 FY23. 8.4 8.3 7.9 7.7 5.8 G&A expenses increased in H1 FY24 by $0.2 million vs H2 FY23 due to share- H1 FY21 H2 FY21 H1 FY22 H2 FY22 H1 FY23 H2 FY23 H1 FY24 based payments expenses in H
Slide 59: Fixed cost leverage effect
Fixed cost leverage effect Variable costs: + Mainly comprise AU card processing and US ACH Indicative impact of fixed cost leverage on processing costs and interest. hypothetical future half-yearly year-on-year revenue growth of 30-40% + Are approximately 30% - 35% of revenue. + Are 30% - 40% of tot
Slide 60: Low credit-loss business model
Low credit-loss business model Low bad debt write-offs Rigorous onboarding and underwriting A$’M FY23 H1 FY24 + Onboarding credit checks and credit limit assessments, including external credit checks. Total lending 77.5 46.3 Total bad debt write-offs 0.78 0.66 + Firm qualifications: % of lending 0.1
Slide 61: Ensuring low credit loss
Ensuring low credit loss Ongoing monitoring and collections Additional ongoing credit protections + QuickFee may approve or decline any Client or Client invoice. + Well-developed collection policy that starts the same day a failed direct debit is flagged and recoups all funds + Client instalments ar
Slide 62: Positive momentum in H2 FY24
Positive momentum in H2 FY24 H1 FY24 Q3 FY24 (Jan + Feb 2024) vs pcp + Group revenue up 35% on pcp to A$9.3m driven by: US Finance TTV US Pay Now TTV AU Finance (Pay Over Time) revenue up 57% on pcp US Finance (Pay Over Time) revenue up 58% on pcp +39% +17% US Finance Total Transaction Volumes
Slide 63: Why QuickFee, Why Now
WHY QUICKFEE, WHY NOW
Slide 64: Unlocking transformational growth in the US
Unlocking transformational growth in the US Drive Cost Effective Growth QuickFee Finance Through Automation Revenue yields on the Finance Leverage automation across all product are approximately 25x functional areas to ensure we are those of Pay Now. driving growth in the most efficient, cost-effect
Slide 65: Setting our sights on $100M revenue
Setting our sights on $100M revenue 100 Key initiatives under consideration on the path to $100M: + Subscription pricing model / recurring revenue 33 + Expansion of QuickFee Finance into secondary 9.3 verticals + Potential market expansion into Canada -2.2 H1 FY24 Future + Sufficient growth capital
Slide 66: Why QuickFee, why now
Why QuickFee, why now Top tier management team in $84B in Serviceable Addressable Winning, differentiated value proposition: place with owner mentality Accountant Market in the US Alone Finance, Connect, Pricing Proven track record of delivering Ability to 8X TTV without adding Growing customer base
Slide 67: Disclaimer
Disclaimer The material contained in this document has been prepared by QuickFee does not undertake any obligation to publicly release the QuickFee Limited ACN 624 448 693 (‘company’) and contains result of any revisions to these forward-looking statements to general information about the company’s
Slide 68: Appendix
APPENDIX
Slide 69: Historical metrics - US
Historical metrics - US FY21 FY22 FY23 FY24 Total Transaction Volumes (TTV) Q1 Q2 H1 Q3 Q4 H2 FY21 Q1 Q2 H1 Q3 Q4 H2 FY22 Q1 Q2 H1 Q3 Q4 H2 FY23 Q1 Q2 H1 Professional Services US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M US$M Pay
Slide 70: US product profitability
US product profitability ACH Card Financing BNPL Total US$000s except volume H1 FY24 H1 FY23 H1 FY24 H1 FY23 H1 FY24 H1 FY23 H1 FY24 H1 FY23 H1 FY24 H1 FY23 Volume US$ M 517 452 109 96 13.6 10.1 1.2 1.2 639.6 559.3 Financing revenue (interest) - - - - 1,131 715 - 90 1,131 805 Payments and other reve
Slide 71: Historical metrics - AU
Historical metrics - AU FY21 FY22 FY23 FY24 Total Transaction Volumes (TTV) Q1 Q2 H1 Q3 Q4 H2 FY21 Q1 Q2 H1 Q3 Q4 H2 FY22 Q1 Q2 H1 Q3 Q4 H2 FY23 Q1 Q2 H1 Professional Services A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M A$M Pay Now 6 6 12 EFT 3.5 3.5 7
Slide 72: AU product profitability
AU product profitability EFT & card Financing BNPL Total A$000s except volume H1 FY24 H1 FY23 H1 FY24 H1 FY23 H1 FY24 H1 FY23 H1 FY24 H1 FY23 Volume A$ M 37 29 25.4 20.6 1.4 0.8 638 50.4 Financing revenue (interest) - - 3,262 2,089 67 29 3,329 2,118 Payments and other revenue 409 353 345 239 5 780 5
Slide 73: Glossary
Glossary ACH Automated Clearing House A type of electronic bank-to-bank payment in the US, equivalent to EFT in Australia Active customer Any customer who has transacted with QuickFee in the relevant period Active firm Any firm that has had a transaction with QuickFee in the relevant period APR Annu