"It highlights that a higher level of cross-selling and bundle selling has resulted in more products per customer but it didn't add to total customer numbers.
"This has alleviated some of the investor concerns. While the market still wants to see total customers growing, this clarification shows that new sales have not been as poor as they first appeared."
Meanwhile, Forsyth Barr analyst Jamie Foulkes - Pushpay's most bullish backer - issued a new research note today in which he maintained his outperform rating, but cut his 12-month target price from $13.86 to $11.44.
Foulkes says there was higher than expected churn with Pushpay's Community Church Builder software, especially among smaller churches.
He also anticipates that Pushpay could now be "reliant on acquisitions to reach its long-term revenue targets."
Foulkes also trimmed his FY2021 operating earnings target slightly from US$60.8m to US$60.5m, though he is still running ahead of the company's official line (yesterday, Pushpay raised its full-year ebitdaf guidance a third time, this time to between US$54m and US$58m).
The ForBarr analyst emphasised that he remained positive about Pushpay's prospects overall for reasons including "a large and growing addressable market", and "a high degree of cash-generation."
Craigs Investment Partners' Stephen Ridgewell called it a "very strong result".
Other theories about the sell-off included that some investors saw the Huljich family's departure from the board (announced yesterday) as a sign it would further sell-down its stake, or simple profit-taking after its recent big run-up (Pushpay's fall is relative. Even after its pullback over the past two days, the stock is still up 170.8 per cent for the year).
Strong earnings growth
In its interim report yesterday, Pushpay said total customers were 10,896 - up 38 per cent against the first half of FY2020, but flatlined since March.
While the pandemic had been so key to accelerating adoption of digital-giving via Pushpay as congregations turned to meeting over Zoom, it also hampered travel and face-to-face selling.
Nevertheless, Pushpay - which is listed on the NZX and headquartered in Auckland but does most of its business with US congregations and reports in US dollars - said processing volume from US$2.2b to US$3.2b. But monthly average revenue per customer slipped 1 per cent to US$1272.
The increases have come as use of Pushpay's software has boomed during US lockdowns. Analysts see the pandemic as a catalyst for more churches going digital, and keeping Pushpay's pay-monthly software long-term.
Craigs' Ridgewell said the first-half result showed Pushpay was beginning to reap the benefits of scale, and its $132m acquisition of congregation management software maker Church Community Builder last year - which gave Pushpay a full range of software for the first time.
Net debt reduced from US$50m as of March 31, 2020 to US$25m.
While the US is now in recession, chief executive Bruce Gordon told a conference call that digital giving was increasing as a proportion of total giving fast enough to offset any decline in total giving.
Headcount increased 23 per cent to 441, split between offices in Auckland, Seattle and Colorado.
On the conference call, chairman Graham Shaw and Gordon made no mention of a pending dividend.
Jarden analysts Wassim Kisirwani and Wilson Wong earlier picked a profit payout from FY2022, initially at a modest 0.9 per cent yield.
Gordon - a former chairman of the company who was drafted in as CEO after the departure of co-founder Chris Heaslip in mid-2019 - announced his intention to step down at the company's July annual meeting.
Change at the top
The search for his successor is still underway.
Pushpay's first female director, Justine Smyth, resigned for personal reasons just weeks after her appointment was confirmed at the July AGM. Smyth continues as chairwoman of Spark and in other director roles.
Smyth's vacant seat was taken by Lorainne Witten, who also sits on the boards of Rakon and TIL Logistics.
'Aspirational goal' underlined
During today's call, Gordon reiterated Pushpay's "aspirational goal" to capture 50 per cent of large churches, which he says would yield around US$1 billion in annual revenue. Once again, he declined to put a timeline on the target.
Earlier, Craigs' Ridgewell noted that Pushpay has only one company that could be considered close to a direct competitor - Blackbaud.
Yet the two companies also operate more or less in parallel in the faith segment, Ridgewell noted, with Blackbaud's base in Catholic churches and Pushpay doing most of its business with Protestant congregations.
While Gordon has turned Pushpay's back on his predecessor's plan to diversify into non-profits and education, the Nasdaq-listed Blackbaud operates across a number of sectors. It came unstuck earlier this year after a breach that saw alumni and donor data from Auckland and Otago Universities at risk. In July, Blackbaud raised eyebrows with a market filing in which it acknowledged paying an undisclosed sum to a ransomware gang to restore seized files.
