Tyro Payments Earnings: Fundamentals Strong Notwithstanding Near-Term Headwinds

The 41% increase in no-moat Tyro’s first-half fiscal 2024 EBITDA to AUD 27 million slightly exceeded our forecast. Its increased EBITDA margin of 26%, above 20% in the previous corresponding period, demonstrates strong operating leverage, driven by both volume growth and effective cost management—namely cost reductions and process automation. This suggests Tyro is on track toward maintainable profitability from previously incurring losses, with fiscal 2024 guidance indicating continued growth in volumes and earnings compared with fiscal 2023. Although guided volume growth was slightly below what management had expected, the increased earnings guidance suggests the potential for further monetization of products and reduction of noncore costs to compensate for softer volume growth.