New Zealand Professional Investment Services Firm

Forsyth Barr

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New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Pushpay Pointers</h2>
Tithe.ly (closest PPH competitor) product update
<ul>
<li>Tithe.ly (closest PPH customer) updated customer churches with a number of product updates (<a href="https://get.tithe.ly/" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://get.tithe.ly/&amp;source=gmail&amp;ust=1597275645036000&amp;usg=AFQjCNEmbFy03Kr46-kof4nRDjjyY9IS4A" rel="noopener">https://get.tithe.ly/</a> 10am PST/1pm EST) this morning 5am NZST</li>
<li>The product updated reiterates to us how basic Tithe.ly’s current product offering is compared to PPH’s</li>
<li>Updates either included non-competitive add-ons for PPH (Tithe.ly Pay) or features that PPH already have (Quickbooks integrations, sermon re-watch on the app)</li>
<li>A small number of larger churches in the US are beginning to meet in person with churches slowly reopening albeit a very small proportion with limited persons and strict safety policies</li>
</ul>
Tithe.ly updates
1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tithe.ly pay:&nbsp;Tithe.ly have released a point of sale device called Tithe.ly Pay which allows contactless payment for church coffee shops and book shops. The device costs $79 and is compatible with Tithe.ly’s template app.
Our view:&nbsp;Tithe.ly pay is clearly aimed at merchandising functions of the church rather than a focus on donations and as a result has limited impact on competing with Pushpay’s current product offering. We would also assume most churches to already have some form of contactless payment. Square would be the nearest competitor for Tithe.ly Pay, with Tithe,ly looking to replicate Square in a church setting.
2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Update to donor management system and template app. Nothing ground breaking here as added features allow improved filtering for the donor management system and for the app, with the app now able to filter and download by sermon series, rather than individual sermon.
Our view:&nbsp;A nice to have but hard to see where it adds real value – Pushpay’s donor management system is already ranked by customer churches that we spoke to as having the highest level of functionality while Tithe.ly’s app is more a template app vs Pushpays app which has a higher degree of church customisation.
3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cheque scanning – now available with the integrated Tithe.ly donor management system and integration with Quickbooks
Our view: Again, Tithe.ly is late to the party as Pushpay has been able to use both these features (with a much larger number of integrated partners) for a number of years
Conclusion: On watching Tithe.ly’s presentation we are not overly concerned as to the competitive threat and reiterate our view that Pushpay’s product has best in class product functionality and superiority. Tithe.ly has added a number of features already on the Pushpay platform, with Tithe.ly’s more basic product aimed at smaller and less tech-savy churches. &nbsp;
Update on the US church’s reopening
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A very small number of churches (Saddleback/Gateway church for example) have re-opened their doors last Sunday. This has seen hugely limited numbers of people attend (in the younger demographic). Many churches are keeping doors closed for the foreseeable future and some do not aim to re-open until at least 2021.
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Those churches reopening have strict safety procedures including social distancing, face masks etc (<a href="https://gatewaypeople.com/events/weekend-services-live-at-all-campuses-2" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://gatewaypeople.com/events/weekend-services-live-at-all-campuses-2&amp;source=gmail&amp;ust=1597275645036000&amp;usg=AFQjCNFTqv1KFITxlDmUwlZGlyQop8xrDA" rel="noopener">https://gatewaypeople.com/events/weekend-services-live-at-all-campuses-2</a>), (<a href="https://www.centercville.com/reopening" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.centercville.com/reopening&amp;source=gmail&amp;ust=1597275645036000&amp;usg=AFQjCNEwABoetHq2j-9oU0YRSn-FN0qnUA" rel="noopener">https://www.centercville.com/reopening</a>)
What does this mean for Pushpay?
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On meeting recently with management, the&nbsp;company highlighted difficulties on getting sales employees into churches&nbsp;and likely see a backlog of customer onboarding once churches do fully re-open. Decision making processes have been on hold with many churches making decisions through the board of elders which have not been able to meet in recent months. However CCB has been more attractive to churches than Pushpay originally expected. We expect once more churches reopen and normalise, Pushpay will reverse the decision to have all US staff working remotely from home and will be able to get into churches again.
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Online church very much remains the prime communication tool for pastors and their congregations and those churches re-opening are continuing their online offering. Churches around the world (including New Zealand) are also continuing online church in addition to churches physically reopening.&nbsp;We see this online trend as here to stay.
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following our initiation of Pushpay which highlighted strength of the back book going forward and the underlying growth of the Evangelical and Nondenominational church, a good example of movement into the Nondenominational church is the Alpha course started in 1977 and now in over 100 countries and translated in over 100 different languages (over 1.3m people attending globally in 2019) and heavily prevalent in the US: <a href="https://alphausa.org/about" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://alphausa.org/about&amp;source=gmail&amp;ust=1597275645036000&amp;usg=AFQjCNHkHbV6o2z2bi6ysbyIcqfSVJPKbA" rel="noopener">https://alphausa.org/about</a>.&nbsp;Alpha is now also online on a global basis and set to continue throughout COVID.
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With a small number of churches now reopening, channel checks confirm that&nbsp;no church administrator/pastor of stewardship wants to handle cash, cheques or coins in the current environment. We do not see change to this with churches reopening and for digital giving to continue.
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Being back in church may also provide an&nbsp;extra inventive for congregational members to give&nbsp;and allow pastors to drive donations in person.
Jamie Foulkes&nbsp; Analyst, Equities
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.1&amp;permmsgid=msg-f:1674759013005831148&amp;th=173df072f698abec&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ_X5KuphlJM6AX_iksdiZ6KLNDijHQD2bzdyf7-00_zGA3MuGVwDZ6PdeX01cUUyvkKw1PF9BHVR8j93uP-i39WX88uS6xgzmf0f2Wf0KIX0KznCeyAqEs6hDk&amp;disp=emb" class="editor-image img-responsive"></figure>
M: +64 20 4196 2993 |P: +64 4 914 2217 |TF: 0800 367 227&nbsp; Level 22, NTT Tower, 157 Lambton Quay, Wellington

Pushpay Pointers
Tithe.ly (closest PPH competitor) product update

Tithe.ly (closest PPH customer) updated customer churches with a number of product updates (https://get.tithe.ly/ 10am PST/1pm EST) this morning 5am NZST
The product updated reiterates to us how basic Tithe.ly’s current product offering is compared to PPH’s
Updates either included non-competitive add-ons for PPH (Tithe.ly Pay) or features that PPH already have (Quickbooks integrations, sermon re-watch on the app)
A small number of larger churches in the US are beginning to meet in person with churches slowly reopening albeit a very small proportion with limited persons and strict safety policies

Tithe.ly updates
1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tithe.ly pay:&nbsp;Tithe.ly have released a point of sale device called Tithe.ly Pay which allows contactless payment for church coffee shops and book shops. The device costs $79 and is compatible with Tithe.ly’s template app.
Our view:&nbsp;Tithe.ly pay is clearly aimed at merchandising functions of the church rather than a focus on donations and as a result has limited impact on competing with Pushpay’s current product offering. We would also assume most churches to already have some form of contactless payment. Square would be the nearest competitor for Tithe.ly Pay, with Tithe,ly looking to replicate Square in a church setting.
2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Update to donor management system and template app. Nothing ground breaking here as added features allow improved filtering for the donor management system and for the app, with the app now able to filter and download by sermon series, rather than individual sermon.
Our view:&nbsp;A nice to have but hard to see where it adds real value – Pushpay’s donor management system is already ranked by customer churches that we spoke to as having the highest level of functionality while Tithe.ly’s app is more a template app vs Pushpays app which has a higher degree of church customisation.
3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cheque scanning – now available with the integrated Tithe.ly donor management system and integration with Quickbooks
Our view: Again, Tithe.ly is late to the party as Pushpay has been able to use both these features (with a much larger number of integrated partners) for a number of years
Conclusion: On watching Tithe.ly’s presentation we are not overly concerned as to the competitive threat and reiterate our view that Pushpay’s product has best in class product functionality and superiority. Tithe.ly has added a number of features already on the Pushpay platform, with Tithe.ly’s more basic product aimed at smaller and less tech-savy churches. &nbsp;
Update on the US church’s reopening
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A very small number of churches (Saddleback/Gateway church for example) have re-opened their doors last Sunday. This has seen hugely limited numbers of people attend (in the younger demographic). Many churches are keeping doors closed for the foreseeable future and some do not aim to re-open until at least 2021.
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Those churches reopening have strict safety procedures including social distancing, face masks etc (https://gatewaypeople.com/events/weekend-services-live-at-all-campuses-2), (https://www.centercville.com/reopening)
What does this mean for Pushpay?
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On meeting recently with management, the&nbsp;company highlighted difficulties on getting sales employees into churches&nbsp;and likely see a backlog of customer onboarding once churches do fully re-open. Decision making processes have been on hold with many churches making decisions through the board of elders which have not been able to meet in recent months. However CCB has been more attractive to churches than Pushpay originally expected. We expect once more churches reopen and normalise, Pushpay will reverse the decision to have all US staff working remotely from home and will be able to get into churches again.
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Online church very much remains the prime communication tool for pastors and their congregations and those churches re-opening are continuing their online offering. Churches around the world (including New Zealand) are also continuing online church in addition to churches physically reopening.&nbsp;We see this online trend as here to stay.
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following our initiation of Pushpay which highlighted strength of the back book going forward and the underlying growth of the Evangelical and Nondenominational church, a good example of movement into the Nondenominational church is the Alpha course started in 1977 and now in over 100 countries and translated in over 100 different languages (over 1.3m people attending globally in 2019) and heavily prevalent in the US: https://alphausa.org/about.&nbsp;Alpha is now also online on a global basis and set to continue throughout COVID.
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With a small number of churches now reopening, channel checks confirm that&nbsp;no church administrator/pastor of stewardship wants to handle cash, cheques or coins in the current environment. We do not see change to this with churches reopening and for digital giving to continue.
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Being back in church may also provide an&nbsp;extra inventive for congregational members to give&nbsp;and allow pastors to drive donations in person.
Jamie Foulkes&nbsp; Analyst, Equities

M: +64 20 4196 2993 |P: +64 4 914 2217 |TF: 0800 367 227&nbsp; Level 22, NTT Tower, 157 Lambton Quay, Wellington

Pushpay Pointers: Tithe.ly (Closest PPH Competitor) Product Update

Pushpay Holdings

Pushpay Pointers: Tithe.ly (Closest PPH Competitor) Product Update