Change Financial strategic US market withdrawal

Change Financial (ASX:CCA) has announced its decision to exit the US market. This move is due to regulatory challenges affecting its issuing bank partner. The company will now focus on the Payments as a Service market in Australia and New Zealand. The impact on revenue is minimal, but significant cost reductions are expected.

Change Financial strategic shift and future outlook

Change Financial is withdrawing from the US market due to regulatory challenges, focusing instead on the more promising Payments as a Service market in Australia and New Zealand. The US operations had minimal revenue impact, but their closure will significantly reduce costs, improve EBITDA, and enhance cash flow. The company is on track to achieve over 30% revenue growth and a maiden EBITDA positive result in FY25. With a strategic focus on the ANZ region, Change has seen record revenue growth driven by PaaS clients and new client acquisitions. This strategic shift aims to capitalize on areas with substantial growth opportunities while leveraging its technology solutions like Vertexon PaaS and PaySim testing services.

Executive commentary on strategic withdrawal

The US operations have been deemed unsustainable in the near term due to increased regulatory challenges. However, this decision allows us to focus on more promising markets in Australia and New Zealand, aligning with our goal of achieving profitable growth and improving operating leverage.