Openpay : Quarterly Update and Appendix 4C

Quarterly Update and Appendix 4C 28 April 2022

Openpay continues to deliver robust growth and strong margins in ANZ with solid progress in the US

Key Highlights - Q3 FY22

•  Solid growth across leading indicators, notwithstanding reduced UK operations:

  • o Total Active Merchants of 4.2k up 24% compared to pcp (Q3 FY21)

    - ANZ Active Merchants up 22% to 4.1k vs pcp

  • o Total Active Customers of 589k up 17% compared to pcp

    - ANZ Active Customers up 23% to 312k vs pcp

  • o Total Active Plans of 2.4m up 41% compared to pcp

    - ANZ Active Plans up 54% to over 1.6m vs pcp

  • o Total Group TTV of $94m up 14% compared to pcp

    - ANZ TTV of $86m up 54% compared to pcp

  • o Total Group Revenue (including OpyPro) reached $8.7m, up 32% compared to pcp

    - ANZ Revenue (including OpyPro) of $7.5m, up significantly by 62% compared to pcp

•  Market-leading margins in ANZ

  • o Global Revenue Margin has improved from 7.8% in Q3 FY21 to 9.1% in Q3 FY22

    - ANZ Revenue Margin was 8.6% (vs 8.0% in Q3 FY21)

  • o Global NTM has improved from 0.1% in Q3 FY21 to 2.3% in Q3 FY22

    - ANZ NTM was 3.3% (vs 2.2% in Q3 FY21)

  • o Global NTL has improved from -2.3% in Q3 FY21 to -0.9% in Q3 FY22

    - ANZ NTL was -0.9% (vs -1.3% in Q3 FY21)

•  Strong trends in arrears and bad debts

  • o Total Arrears down from 4.2% in Q3 FY21 to 2.4% in Q3 FY22, ANZ Arrears only 1.8%

  • o Total Net Bad Debts down from 3.3% in Q3 FY21 to 2.7% in Q3 FY22, ANZ Net Bad Debts only 1.8%

•  In Australia, Openpay was ranked 3rd in the Australian Financial Review Best Place to Work awards (Banking, Superannuation and Financial Services category)

•  In the UK, Openpay continues to explore opportunities to monetise its platform in a capital-light manner

•  Opy US progressing well with ongoing work on capital strategies to support and accelerate growth in ANZ and US

•  OpyPro, Openpay's B2B SaaS platform, continues to perform strongly delivering record growth across key metrics

MELBOURNE Australia, 28 April 2022: leading payments fintech, Openpay Group Ltd (ASX: OPY) (Openpay or the Company) is pleased to release its quarterly business update for the period ended 31 March 2022 (Q3 FY22).

Ed Bunting, Interim Group CEO, highlighted: "The Group made some tough decisions earlier this year to reduce its UK operations while focusing on ANZ accelerated pathway to profitability and the US as our key growth engine. The renewed strategic direction is delivering strong financial performance and will create long-term value for shareholders. We are pleased to restate that our ANZ business is on track for profitability within 15 months, while we continue to progress our capital strategy to support US growth."

Dion Appel, ANZ CEO, said: "Our focused strategy is working and we are thrilled to be delivering our strongest Q3 results on record across all key indicators, including market-leading unit economics as we manage our business to profitability."

Group Update

Openpay continues to partner with

aggregators and distributors to grow at scale

both in ANZ and in the US. Active Merchants

increased 24% vs pcp to 4.2k as at Q3 FY22.

Strong growth is expected in upcoming

quarters from signed deals in ANZ and ramp-

up in the US.

Active Customers grew 17% vs pcp to reach

589k at the end of Q3 FY22, impacted by

reduced operations in the UK. ANZ continues

to grow strongly, up 23% vs pcp.

In the quarter, Openpay's improved customer

experience and strong value proposition led

to a record 57% of Openpay's customers

holding multiple active plans (ANZ: 63%), and

90% of active plans are held by repeat

customers (ANZ: 91%).

Active Plans increased 41% vs pcp, reaching

2.4m at the end of the quarter, despite UK

operations being significantly reduced. ANZ

grew a solid 54% vs pcp.

During Q3 FY22, 84% of TTV was from plans

three months or longer as the Company

continues to gain traction across target

verticals in ANZ and the US.

ANZ Update - targeting to deliver profitability within 15 months, underpinned by strong unit economics

Openpay's Q3 FY22 results continue to reinforce the ANZ business model with further momentum and improvement across lead indicators following a record Q2 FY22 that included the Christmas peak period.

Openpay ANZ achieved quarterly TTV of $86m, an increase of 54% vs pcp. In March alone, daily ANZ TTV averaged $1m, up 50% vs pcp. ANZ BNPL Revenue increased a substantial 65% pcp to reach $7.4m at the end of the quarter. This strong performance was coupled with our market-leading revenue margin of 8.6% (up 60bps vs pcp) and NTM of 3.3% (up 110bps vs pcp) in Q3 FY22.

Continued growth across key leading indicators, with Active Merchants reaching 4.1k, an increase of 22% vs pcp, driven by strong growth across key consumer segments. Active Customers grew at 23% vs pcp to reach over 312k in Q3 FY22 and Active Plans grew a strong 54% vs pcp to over 1.6m, highlighting increased demand for Openpay's payment plans and value proposition.

In March, Openpay's integration with e-commerce platform BigCommerce went live and is available in all Openpay's markets. In Australia, this has now facilitated well-known merchants such as Superdry (the first brand to launch under a broader deal with Brand Collective), Milano Republic, and Tool Kit Depot. Important to note that Brand Collective is also on the Apparel 21 POS platform with which we have a native integration. This aggregator partnership made the integration in-store with Superdry smooth and seamless. This is very much part of our channel partner aggregatorstrategy to scale merchants smartly across all our verticals. Other notable merchants signed in Q3 include Tyrepower, Clear Aligners Excellence, Howard Storage World, AFL Stores, and more. In Education, Openpay signed RMIT, with Openpay providing payment plans for students enrolling in online courses that don't receive Government Support (HECS).

Our targeted approach continues to deliver market-leading margins and together with business simplification and efficiencies, support Openpay's ambition to deliver profitability in ANZ within 15 months.

US Update - Continued progress

Openpay continues to progress its US operations, with the following key highlights during the quarter:

•  Opy advanced into other US jurisdictions, including the US states of Georgia and Wyoming, allowing Opy the ability to operate in 47 US States, with final states to be in place in the coming weeks.

•  Completed testing and tuning on the products in order to validate the larger ticket transactions Opy is targeting across chosen verticals.

•  Large (confidential) insurance partner successfully launched, with salesforce training and marketing initiatives underway.

•  Imminent launch of BNPL 2.0 pay by text innovative offering with partner Everyware, an exciting capability with strong applicability in Automotive and Healthcare where text scheduling and payments communications are very common.

•  Opy continues to attract very large ecosystems partners (like FIS and Amex) and large vertical-specific aggregators across target verticals. This is a central part of Opy's go-to-market strategy through revenue share deals with partners. Several new deals are in late stages of negotiation, including cross-vertical payments processing partners and vertical-specific partners offering Opy access to thousands of merchants and millions of consumers.

Openpay continues to work with investment bank Keefe, Bruyette & Woods (KBW) on capital strategies to support the US growth, which may include direct equity or debt investment in Opy USA or its subsidiaries. Securing suitable capital funding is a critical milestone to enable Opy USA to proceed to full commercial launch and scale in the US.

While there is currently no certainty that an investment may eventuate, Openpay will continue to keep the market updated as appropriate.

UK Update - Exploring opportunities

Following the Company's January announcement, Openpay's UK operations and associated cost base have been significantly reduced, resulting in a release of capital back to Australia. Openpay will continue to explore opportunities to monetise the UK platform in a capital-light manner going forward.

OpyPro Update - Strong performance with record growth

OpyPro, Openpay's B2B SaaS platform continued to grow strongly with Q3 FY22 TTV on the platform reaching $10.4m, up 602% vs pcp.

Total active accounts grew 157% vs pcp with over 8,000 active accounts and more than 9,100 accounts now onboarded to platform. Revenue from transaction fees increased 585% vs pcp, driven by volume and accounts growth.

Volumes from existing OpyPro enterprise clients live on the platform in Australia continues to grow as funding from partner Lumi delivers a positive impact to utilisation, where funding is required. Delivering on OpyPro's promise to be a SaaS platform business that is capital light and very low risk.

New contracts have been signed with Home Improvements company Sunstar Flooring with the pipeline for new enterprise customers continuing to grow and mature.

Financial Performance

ANZ TTV continues to grow at a strong pace, reaching $86m at the end of Q3 FY22 (up 54% vs pcp). In March alone, daily ANZ TTV averaged $1m, up 50% vs pcp. Q3 FY22 Group TTV continued to grow to reach $94m, despite the Group's decision to significantly reduce its UK operations.

ANZ BNPL revenue grew 65% to reach $7.4m in Q3 FY22. Group BNPL Revenue increased 33% to $8.6m, impacted by the reduction in revenue from its moderated UK operations which will continue to decline as the UK operations run off.

Openpay continues to deliver market-leading

margins, with ANZ's revenue margin of 8.6% in Q3

FY22, while Group's revenue margin was 9.1% for

the quarter

NTM for ANZ was 3.3%, while Group NTM was

2.3% in the quarter.

NTL for ANZ was -0.9%, while Group NTL was also

-0.9% in Q3 FY22.

Portfolio performance improved vs pcp. ANZ Q3

FY22 stand-alone Arrears are only 1.8% (vs 2.2% in

Q3 FY21) and Net Bad Debts only 1.8% (vs 1.9% in

Q3 FY21). Group Arrears levels have dropped to

2.4% (vs 4.2% in Q3 FY21) and Net Bad Debts

decreased to 2.7% (vs 3.3% in Q3 FY21). Openpay

continues to actively manage the portfolio to

ensure asset quality and earnings are sustainable

and strong.

Q3 FY22 cash balance is $27m. Openpay also has $11m ($6m committed) of undrawn working capital facilities. The Group continues to actively manage its funding requirements.

Authorised by:

The Board of Directors Openpay Group Ltd

For further information, please contact:

Investors Aline van Deventer Head of Investor Relations & Communications Mobile: [phone] Ed Bunting Company [e-mail]

Media Australia: Keep [e-mail] USA: Stefan Pollack The Pollack Group Mobile: [phone]

About Openpay

Openpay Group Ltd (ASX: OPY) is a leading payments fintech, delivering smart and friendly solutions to pay and get paid. Openpay delivers an omnichannel financing solution that extends beyond traditional Buy Now, Pay Later in the form of their next-generation "BNPL 2.0" product. BNPL 2.0 provides the gateway to complete transactions, up to $20,000 with payback terms of up to 24-months, across underserved BNPL verticals, including Automotive, Healthcare, Home Improvement, Membership, Education, and Retail. Openpay has fine-tuned its innovative products for both consumers and merchants, providing transparent terms with quick credit decisions and customizable payment plans for consumers, along with a B2B payment offering that facilitates end-to-end trade account management. Openpay operates in Australia and the United States (operating as Opy) and serves New Zealand and the United Kingdom. For more information, please visitwww.opy.com.