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Beforepay Full Year Results to 30 June 2023

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Beforepay (ASX:B4P) has been named 2023 Ethical Lender of the Year by Pan Finance.

A screen in the Beforepay app showing how a customer can Cash Out $200. The screen shows a list of the customer's repayments below an orange Cash Out Now button.

Beforepay provides eligible customers with access to advances of up to $2000 for a 5% fixed transaction fee, with no interest or late fees.

Beforepay delivers continued growth and achieves positive EBITDA

Beforepay Group Limited (ASX:B4P)

This result shows that Beforepay is sustainable and positioned for long-term success.”
— Jamie Twiss, CEO of Beforepay
SYDNEY, NSW, AUSTRALIA, August 28, 2023/ -- Beforepay Group Limited (Beforepay or the Company) (ASX: B4P) has released its results for the full year ended 30 June 2023 (FY23).

During FY23, Beforepay has made significant progress on its path to profitability, with increased customer numbers, strong pay advance volume and revenue growth, strong unit economics underpinned by effective risk management and reduced operating expenses.

Highlights include:
● In Q4 FY23, Beforepay reached a significant milestone, achieving a positive EBITDA for the quarter of $0.5m and its first positive net profit in April 2023 of $0.3m. This was the first time the Company has had a positive quarterly EBITDA.
● Surpassed $1 billion in cumulative pay advances since inception.
● Reached 1 million registered users since inception.
● Pay advances of $628.0m, up 92% on FY22 (year-on-year or YoY).
● Reduction in net transaction loss (NTL) to 2.1% from 2.4% in FY22 even with a significant increase in average pay-advance size.
● Net transaction margin (NTM) of $11.7m, up from $3.6m or 229% YoY, with increasing profitability driven by reduced net defaults.
● Customer acquisition cost (CAC) declined 60% YoY to $42.
Ethical Lender of the Year 2023 in the Global Pan Finance Awards.

Beforepay CEO Jamie Twiss said, "This year we have grown rapidly, improved margins, and reduced our operating expenses, while maintaining a strong balance sheet and significant cash reserves. This result shows that Beforepay is sustainable and positioned for long-term success. We look forward to continuing to execute our strategy, and to helping more Australians access safe and affordable financial products.”

Financial performance – FY23
● Total pay advances grew by 92% YoY to $628.0m driven by both new customer acquisition and continued usage by existing customers. Beforepay has now issued more than $1 billion of pay advances since inception.
● Active users grew by 35% YoY to 234,034. Beforepay has now registered over 1 million users since inception.
● Beforepay income increased 101% YoY to $30.7m in FY23. Beforepay generates its revenue through charging users a fixed fee of 5% per advance, recognised over the period in which the customer advance is repaid.
● Net transaction loss % declined to 2.1% or 9% YoY. Key mitigation efforts on defaults during FY23 included selective reduction of some limits, decreasing limits for customers where creditworthiness had changed, and continued improvements to the credit model. The net transaction loss was also reduced by higher recoveries, which continued to perform well during the year.
● Direct service costs as a percentage of pay advances reduced 45% YoY to 0.3% in FY23 compared to 0.6% in FY22. Our direct service costs generally do not vary with the size of the pay advance.
● Net transaction margin % increased 71% YoY to 1.9% in FY23 compared to 1.1% in FY22, driven primarily by lower net transaction losses during the year and timing effects of revenue recognition. Net transaction margin in dollars increased to $11.7m, up 229% from $3.6m in FY22.
● Total operating expenses (excluding one-off and/or significant items) were $18.7m in FY23, which declined 26% from $25.3m in FY22, reflecting disciplined cost control even while growing strongly.
● Within these operating expense numbers, advertising and marketing expenses attributable to customer acquisition were $5.2m in FY23 or 60% lower than in FY22 ($12.9m). This resulted in the average customer acquisition cost (CAC) declining 60% to $42 in FY23 from $105 in FY22. Employee, general and administration and other costs were $13.5m in FY23 or 9% higher than in FY22 ($12.4m) primarily related to higher recruitment and employment costs and non-recurring one-off staff incentive employment accruals during the year.
● EBITDA loss (excluding one-off and/or significant items) was achieved of ($3.1m), an 84% improvement from the loss of ($19.5m) in FY22, driven by the increase in net transaction margin and reduction in operating expenses.

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 Group’s continuous disclosure announcements available at 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. To the maximum extent permitted by law, no member of the Beforepay Group makes a representation or warranty, express or implied, as to the accuracy, completeness, timeliness or reliability of the contents of this announcement, nor accepts any liability (including, without limitation, any liability arising from fault or negligence) for any loss whatsoever arising from the use of this announcement or its contents or otherwise arising in connection with it.

This announcement includes information regarding past performance of Beforepay Group 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 Standards and is classified as ‘non-IFRS financial information’ under ASIC Regulatory Guide 230 ‘Disclosing non-IFRS financial information’ (‘RG 230’). Beforepay Group considers that non-IFRS information provides useful information to users in measuring the financial performance and position of the Beforepay Group. 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.

Readers are cautioned 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 not included in the audited financial statements are unaudited. Change percentages are calculated using unrounded figures and may differ slightly from a number calculated using rounded figures.

Noeleene Yap
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