Prices have risen across the board, leaving little room for discretionary spending. Any help—gift cards, rewards—is appreciated on that front, allowing platforms like entertainment, lifestyle and rewards platform operator IncentiaPay (ASX: INP) to gain a leg up.
In Q2 FY24, when seasonal events like Christmas, Black Friday and more prompted consumers to loosen the wallet strings, IncentiaPay reported a 25% increase on Q2 FY23 in cash inflows to $4.89 million. This was attributed to higher membership subscription fees and a 72% surge in gift card revenues. It was fueled by the festive season and new gift card options. Membership unit sales also saw a 14% uptick compared to the previous quarter.
Entertainment membership revenues rose by 19% in the last quarter, boosted by successful promotional campaigns like the “BOGOF” Black Friday sale and “Orange Thursday”. The Company kept introducing new benefits for members, allowing for major savings on daily expenses. Plus, on the altruistic end, it supported fundraisers, with approximately $400k raised in the quarter for various charitable causes.
IncentiaPay Chief Executive Officer Ani Chakraborty said, “INP continues its journey of strong operating discipline, managing costs and delivering key business objectives. In this quarter, we have hired Dean Vocisano as our Chief Growth Officer, an established revenue and growth leader in our market. With Dean on board and a far more robust business infrastructure, revenue-building will be our key emphasis as we move into 2024. As the costs are well-optimised, new revenue will come at high operating leverage.”
In the quarter, IncentiaPay expanded Personalised Card Linked Offers (PCLO) with multiple cash back deals. With 81 such deals spanning categories such as dining, travel, and retail, the quarter witnessed a transaction value of approximately $1 million, marking the Company’s highest quarter in this endeavour.
Over 15,000 new participants joined various Frequent Values programs during the quarter. Gift Card revenues saw a 73% rise, propelled by the inclusion of prominent brands like The Good Guys, Target, and Amart (furniture store), along with Pulse Offerings.
Despite a net operating cash loss of $0.96 million, up 23% due to timing, it’s 16.4% better than last year, thanks to cost-saving efforts. It ended the quarter with $1.89 million in cash and equivalents. Plus, the Company successfully negotiated a 12-month deferment for principal and interest payments with its major debtholder. Both payments are now deferred to December 31, 2025, instead of the initial deadline of December 31, 2024.
Over the last eight quarters, IncentiaPay successfully reduced staff costs and overheads through efficient organisational structuring and improved cost controls. Quarterly expenses significantly dropped from $4.18 million in Q3 FY22 to $2.3 million in Q2 FY24.
Comparing Q2 FY24 to the same period last year, the net operating loss has showcased a considerable decrease. This positive trend was primarily driven by reduced operating costs and a strategic focus on higher-margin revenues. Operating cost outflows decreased by $1.15 million (16.4%), indicating the success of the company’s cost optimisation efforts.
With a new Chief Growth Officer and continued cost of living crisis, IncentiaPay is set to remain on its upward trajectory, incentivising customers to save more.
Alinda is a Business Reporter for The Sentiment
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