A Record Breaking Year
We sat down with John Pfisterer, Simpay's CFO, to get a behind the scenes look at where Simpay is today and where they are headed tomorrow. John is excited about the trends he sees.
What are the key strengths of Simpay's growth?
From a 50,000-foot level, our portfolio performed exceedingly well in 2024 with several metrics outperforming industry averages and benchmarks. When I look at the health of our business, I tend to focus on four different metrics that combine to paint an integrated picture of how well our book of business is performing. Those metrics are New Sales Activity, Revenue Attrition, Growth in Processing Volume, and Margin per Dollar Processed.
I noticed two standout highlights that often go unnoticed. Compared to the prior year, collectively the 2024 accounts generated 55% more volume than the accounts originated in 2023 and the average and the profile of the individual clients boarded changed too, they are simply larger merchants, processing more dollars. This is great for all sorts of reasons, including portfolio diversity and bottom-line profits, but it also points to the emerging strength of the economy in certain business types we're focused on. That's fantastic for everyone.
What's the financial outlook for Simpay in 2025?
2025 will be a record-breaking year for Simpay for certain.
We've been seeing an acceleration of the trends over the past couple of years. For instance, in 2024, fourth quarter volume grew by 18% compared to the same quarter in the prior year, each quarter of 2024 grew faster than the one before it. This will continue in 2025 with full year volume growing by a strong 27%.
Net new sales growth is trending in the right direction too and that will drive our gross margin and processing volume to record levels.
From a portfolio perspective, we're seeing attrition trend down to levels well below industry norms. I attribute this success to the tremendous care and support that our clients get from all of Simpay during the sales process, onboarding and deployment, and on-going client support. This is truly a differentiator for our organization in the marketplace.
In a nutshell, we're seeing more onboarded clients, processing more transactions for more dollars, and fewer clients leaving Simpay and that is extremely healthy.
Additionally, we are about to surpass several significant milestones in 2025. We'll double the number of new clients processing with Simpay over 2024, which will rapidly increase the total number of processing clients we serve across our portfolio. Our total processing volume increased by just under 11% in 2024 and our projections show we'll increase again in 2025 by just over 20%.
Both our Payroll portfolio and Commercial Insurance portfolio are set to eclipse their 2024 performance levels as well.
What excites you most about Simpay's long-term goals?
I get excited about three things when I think about the long-term prospects of Simpay.
Fast Growth – “Growth is the essence of life” and nothing is truer in the context of successful companies. We want to grow quickly to achieve the company’s goals, and when we grow quickly our clients and our employees benefit tremendously. Our clients benefit because Simpay is able to develop and roll-out new products, new functionality, and new ways to simplify work so our clients can do more. We benefit as employees because growth brings new challenges and new opportunities and makes all of us learn new skills on a daily basis.
Business Solutions – Payment processing is the foundation of Simpay, but our strategy is much bigger than payments. Every small and medium sized business needs a myriad of products and services to be successful, and Simpay aspires to deliver most of those business-critical solutions. Our ability to deliver value adding commercial insurance products, payroll processing, and access to working capital will delight our customers leading to increased engagement, higher retention, and more overall satisfaction. Our offering is unique in the marketplace and our sales channels and clients are benefitting from the additional services we offer.
Proprietary Products – We plan to deploy Simpay’s own proprietary payment products by mid-year which will help us better serve our ISV partners and e-Commerce clients. Since much of my experience is in the Card Not Present world, and that segment of our business is expanding rapidly, I'm excited for these developments. Our Clover Placement Program has been steadily gaining traction since it's 2024 release. More clients are processing with Clover than ever before and with our program they avoid virtually all of the upfront costs, which has been a barrier for small and medium sized merchants before.
