Electronic B2B payment solutions company Spenda Ltd (ASX:SPX, OTC:CROTF) made significant progress across all programs in the March quarter, including onboarding new customers and launching new products.
Having signed partnerships with Carpet Court, Capricorn, eBev and AirPlus — and with a strong pipeline of contracted work associated with these channel programs — the company is scaling up to execute its pipeline of contracted work.
Spenda also focused on implementing new structures and processes and scaling up internal resources.
Cash receipts up
The company reported cash receipts from customers of A$1.45 million during the quarter, up 77% on the prior March quarter and up 5% quarter-on-quarter.
While the company’s pipeline of work is at record highs, its revenue ramp-up has been slower than expected due to a deliberate conservative scale-up of resources and a focus on retaining a healthy balance sheet through challenging market conditions. This internal scale-up of resources is now being actioned to deliver on the contracted work.
Quarterly payment volumes were up 140% on the prior corresponding period but down 16% from the December quarter. This was a result of lower third-quarter payment volumes through the Carpet Court network, as January and February are seasonally weak months for carpet sales.
Payment volumes increased in March and payment volumes are expected to be stronger in the current quarter.
"Substantial pipeline"
Spenda managing director Adrian Floate said: “In the last quarter, we made significant progress on all the partnerships, as we scale up and establish the processes for sustainable revenue and earnings growth over time.
"The bigger picture potential remains unchanged but the timelines for the delivery of some projects have been extended as we incrementally digest the substantial contracted pipeline of work.
“We are building strong relationships with all our clients and we continue to work collaboratively to identify opportunities for additional projects and capabilities over time.
"I would like to thank our hardworking team for their continued dedication and commitment over these busy few months in scaling up our operations.”
A cornerstone investment by Capricorn Society saw Spenda raise A$7.175 million via a private placement during the quarter, taking its cash balance to A$10.5 million at March 31, 2024.
‘Land and expand’ strategy
Spenda is an integrated business platform that enables businesses across the supply chain to sell better and get paid faster. It is both a software solutions provider and a payment processor, delivering the essential infrastructure to streamline processes before, during and after the payment event.
Across all partnerships, Spenda is focused on a ‘land and expand’ strategy where it starts with an initial project to build trust and credibility and then moves into a long-term relationship to implement digital transformation throughout the client’s network.
This strategy reduces competitive threats by embedding essential infrastructure throughout the whole supply chain, building sustainable recurring revenue over the long term and generating a positive return on investment for the client through improved operational efficiency.