How we are managing through the coronavirus

Today we announced a series of measures that we are taking to reduce our costs in response to the situation with Covid-19. I shared the announcement I made to the company at a town hall meeting this morning here.

We believe deeply in the importance of being transparent and honest with our customers. So alongside sharing this announcement, I wanted to give more context to reassure you that if you are an existing customer or considering adopting us, that you are in safe hands.

Like many others, we have seen a slow down in trading performance in April after our strongest ever month in March. Our processing volumes are tracking 10% behind March, driven by reductions across our health & fitness, membership organisation, and small business customers.

Whilst we are seeing record new business demand for our services, our business model means that our revenues are driven by our existing customer base. So when our customers hurt, we hurt too. Therefore, whilst our future looks more positive than ever, we expect that we will continue to see challenging trading performance in the short term as the world struggles with an increasingly stark macro economic environment. 

We have therefore decided to take measures to temporarily reduce our costs in order to ensure we are well positioned to serve you during these unprecedented times.

We are taking four precautionary measures in order to reduce costs:

• Leaving no stone unturned in reducing our non-headcount spend

• Asking some of our colleagues with no work to do to take a furlough

• Asking our team to take a temporary reduction in salary 

• And finally restructuring our marketing team and efforts

It’s important to note that we are not reducing any spend or investment in any of our core payment processing or customer facing activities. To the contrary, we will continue to ramp up investment to ensure that we provide you with the same high levels of service you have come to expect from us.

We are also investing more than ever in new product development in order to expand the reach of our payment network and introduce payment intelligence products such as Success+.

We realise that as existing customers, you are relying on us now more than ever to navigate these challenging times. We are also seeing many others turn to us in order to help transform their businesses as we all adapt to a new normal.

We want to reassure you that with these changes, our business is in the best shape it has ever been. We are well capitalised to withstand even the heaviest of shocks to our business. In all reasonable scenarios we are on track to reach profitability if we need to. Even in our downside scenario of seeing a 30% drop in revenues that don’t meaningfully improve for the next 12 months, we have enough runway through to 2022. We will be here to support you no matter what.

If you have any questions or concerns then please reach out to us. The whole team at GoCardless is here to support you.