Guess which ASX All Ords tech share is soaring 8% on boosted forecast earnings

This ASX All Ords tech share in the buy now, pay later (BNPL) sector is soaring today on the back of its preliminary half-year results.

The Tyro Payments Ltd (ASX: TYR) share price is lifting 7.66% today and is currently fetching $1.475. For perspective, the S&P/ASX 200 Index (ASX: XJO) is up 0.92% at the time of writing.

Let’s take a look at what this ASX All Ords tech share is reporting to the market today.

Tyro profit lifts 40%

Highlights of the unaudited first-half results for FY23 include:

• Earnings before interest, taxes, depreciation, and amortisation (EBITDA) exploded 601% to $19.5 million
• Statutory gross profit soared 45% on the prior corresponding period (pcp) to $102.8 million
• Revenue lifted 45% to $216.6 million

What else happened?

Underpinning this result was a 37% lift in transaction volume on the previous corresponding period to $21.7 billion.

Growth in the company’s banking business, its cost reduction program, and merchant base growth were also positives for the company.

Banking gross profit soared 73%, with loan originations rising 101% to $72.7 million.

The company’s cost reduction program is on target to deliver an $11 million reduction in its annualised cost base.

Tyro achieved an operating leverage of 80% for the half, down from 96% in the prior corresponding period.

Commenting on the result, Tyro CEO Jon Davey said:

The 37% increase in our transaction value has been driven by a 9% increase in our merchant base, growth in customer applications, and loan originations. External factors such as the absence of COVID lockdowns and inflation have also positively impacted Tyro’s transaction values, particularly in our hospitality and retail verticals.

What’s ahead?

Tyro has updated its FY23 earnings guidance on the back of these financial results. The company is now predicting a transaction value between $42.5 and $43.5 billion. This is higher than the previous guidance of between $40 billion and $42 billion.

As a result of this increased earnings guidance, Tyro is now forecasting a gross profit of between $187 million to $191 million with a targeted operating leverage of 79%.

Commenting on this improved guidance, Davey added:

The first half of FY23 has been exceptionally strong, however in forecasting the second half of FY23, we are taking a cautious approach and have allowed for some softening of consumer trading conditions due to rising interest rates and other macro-economic factors.

We are also focusing on a more disciplined approach to managing the profitability of our merchant portfolio. Based on our forecast for the remainder of FY23, we will be targeting a full year operating leverage of 79% or better.

Share price snapshot

Tyro shares have fallen 42% in the last year.

Tyro has a market capitalisation of about $763 million based on the current share price.

The post Guess which ASX All Ords tech share is soaring 8% on boosted forecast earnings appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tyro Payments. The Motley Fool Australia has recommended Tyro Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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