Digital church collection payment operator Pushpay said a strong December quarter performance should deliver a gross margin of more than 60 per cent for the year ending March.

The company, which had previously expected to beat the 60 per cent measure for the second-half of the period, today reported a 35 per cent increase in December quarter revenue to US$27.7 million ($40.8m).

Total customers at December 31 rose to 7,585, 5.5 per cent more than a year earlier, and the company was cash flow positive and delivered earnings before interest, tax, depreciation, amortisation and changes in financial instruments for the quarter.

Pushpay didn't detail the earnings in what will be the firm's final quarterly report.

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As well as improved revenue growth, chief executive Chris Heaslip said the company's margin improvement process was progressing "much better than expected".

The firm will meet its US$97.5m to US$100.5m revenue target for the March year, and in the coming year expected to deliver an increase in subscription fees added from new customers as it focuses its efforts more heavily on medium and large customers.

Given the firm's expectation of ongoing profitability, Pushpay says it expects to have to recognise some or all of a US$18.5m unrecognised deferred tax asset it has on its books.

"We expect that this will result in Pushpay reporting a substantial net profit after tax" for the year ended March 2019, Heaslip said in a statement.

Pushpay shares rose 8 cents, or 2.3 per cent, to $3.63, trimming their decline the past year to 6.9 per cent.

The NZX-listed, US-headquartered software-as-a-service company provides a donor management system, including donor tools, finance tools and a custom community app for churches. In December, 97 per cent of its customers were in Canada and the US.

Pushpay said that medium and large churches now account for almost 55 per cent of its customers, up from 49.4 per cent a year earlier.

Its average revenue per customer, or church group, climbed to US$1,548 a month in the December quarter – traditionally the strongest quarter for giving. That was 25.6 per cent more than a year earlier and 46 per cent higher than in the September quarter.

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Pushpay also said its annualised processing volume - which is the annualised four-week average payment transaction volume through its platform - increased to US$5.1 billion in the quarter, from US$3.2b at September 30 and US$3.9b in December 2017.

Excluding the seasonal high period, which falls in the last three weeks of December, the annualised processing volume was more than US$4b.

"Pushpay expects total processing volume over the next financial year ending 31 March 2020 to be between US$4.0b and US$5.1b."