Earthport : Year-end earnings and annual report 2017

Financial Highlights

• Revenues increased by 33% to £30.3 million (FY2016: £22.8 million), in line with market expectations
• Transactional revenues comprised approximately 95% (FY2016: 91%) of total revenue
• Adjusted gross profit increased by 30% to £20.7 million (FY2016: £15.9 million)
• Adjusted gross margin of 68% (FY2016: 70%)
• Adjusted EBITDA loss decreased by 58% to £2.9 million (FY2016: £6.9 million)
• Adjusted operating loss (before share based payments charge, exceptional items and unrealised fair value adjustments) decreased by 39% to £6.3 million (FY2016: £10.4 million) mainly due to increase in revenue and achievement of cost efficiency objectives
• Loss after tax increased by 47% to £12.1 million (FY2016: £8.2 million), mainly due to unrealised fair value loss of £4.8 million, compared to a gain of £8.2 million in FY2016
• Cash and cash equivalents at £11.9 million (FY2016: £14.4 million)

1. Adjusted gross profit and margin figures are before warrant charge of £0.5m (FY2016: £0.6m), share based payment charge, unrealised fair value adjustment and exceptional items

2. Adjusted EBITDA is before warrant charge of £0.5m (FY2016: £0.6m), share based payment charge, unrealised fair value adjustment and exceptional items

Operational and Transactional Highlights

• Number of transactions processed reached 11.0 million (FY2016: 6.6 million), up by 67%
• Payment volume was $17.5 billion, an increase of 48% over prior year
• Average revenue per transaction of £2.64
• Gaining traction with European-based global Banks:
  • Experiencing increasing transaction volumes and multiple engagements with existing clients
  • Extending relationships with current clients, and now have some multiple-product relationships
• US Markets:
  • Increased our operations with Bank of America Merrill Lynch ('BAML'), launching Cashpro service in multiple currencies and countries
• Emerging Markets:
  • Gained approval from the Reserve Bank of India to provide out bound cross-border payment services
  • Signed agreements with Axis Bank, Kotak Mahindra Bank and DBS Bank in Singapore.

3. Figure shown in US dollars to conform with market practice

Post-Period Highlights

• Successful equity placing raising gross proceeds of £25 million to capture growing pipeline in Asia and invest further in operating efficiencies and product development as volumes continue to grow.

Hank Uberoi, CEO of Earthport, commented: 'FY2017 has been a positive year for Earthport, with good progress made across the business. We are committed to a long-term strategy of continuing to develop the world's leading cross-border payment platform, enabling global commerce through effortless money movement. Through our services we can enable our clients and partners to accelerate the growth of their cross-border payments businesses without taking on additional business complexities. Above all, we place emphasis on enhancing the customer experience by harmonising our suite of products and services, further streamlining our internal processes, and simplifying products for our customer base.

'We believe that the wider macro-economic environment is favourable, and that opportunities for growth remain in both established markets and developing economies. The progress made in FY2017 has established a solid platform from which we can continue to grow, and we look forward to FY2018 with confidence in both our operational and financial performance.

'Lastly, I would like to take this opportunity to thank everyone at Earthport for their continuing hard work. It is the people that make this business, and our team is positioned for many more successful years.'