Splitit Payments Ltd

Q4 MSV was $141 million and registered revenue was $3.1 million. Net transaction margin was 1.3% in Q4, described as more than 50% year-over-year growth in margin, and full-year 2022 net transaction margin was 1.4%. Operating expense was $4.7 million, down $2.7 million year over year. Cash on hand was just under $30 million, with $19.2 million available for operating activities. Full-year 2022 MSV closed at $231 million, up 9% year over year, and revenue grew 6% year over year in Q4. Management said the company expects Q1 2023 to be somewhat softer seasonally, with top-line growth scaling in Q2 through Q4, and is targeting an MSV run rate of $700 million to $800 million by the end of 2023. They also said the Checkout.com relationship could be worth over $600 million in MSV in a couple of years, and the Worldline opportunity could be worth up to $1 billion in MSV over 2 to 3 years.

Nandan Sheth framed 2022 as a transition year and said the strategic pivot to embedded, white-label installments is already producing better merchant traction and larger partnerships. He emphasized execution over strategy now, pointing to Checkout.com, AliExpress, Worldline, Google expansion, and Tabby as evidence that the platform is gaining momentum with enterprise partners. His tone was confident and constructive, but he also stressed that many of the wins still need to be implemented and matured.

Ben Malone highlighted that Q4 delivered the company’s highest quarterly MSV and revenue, with 9% MSV growth and 6% revenue growth year over year. He said Q4 net transaction margin was 1.3%, up over 50% year over year, helped by lower funding costs and a sharper focus on profitable merchants, and noted that over 30% of the portfolio is now on a nonfunded product, which he called a structural advantage. He also pointed to rebased OpEx being held in line with prior quarters and said the path to profitability depends on implementation and onboarding pace, with profitability seen as achievable around $1.5 billion to $2 billion of MSV.

Analysts asked about the time frame to profitability, and management said it has not given a fixed date; instead, profitability will depend on implementation speed and onboarding, with a target of being able to achieve it once MSV reaches roughly $1.5 billion to $2 billion. On near-term trading, management said Q1 2023 is starting softer seasonally, but several sizable implementations are coming, and they expect stronger growth from Q2 onward. Questions also covered Amazon, a consumer app, conversion rates versus BNPL, and brick-and-mortar expansion; management said it is not trying to replicate Amazon’s existing model, sees no current need for a consumer app, cited conversion rates of 80% to 95% and checkout share as high as 35%, and said point-of-sale commerce is a major future opportunity.