Change Financial (ASX:CCA) announced its strategic withdrawal from the US market to focus on expanding its Payments as a Service operations in Australia and New Zealand.
The company cites challenges with the US regulatory landscape as a key factor in its decision to exit.
The change comes after assessing the impact of recent US regulatory events, which have strained Change's issuing bank partner.
"Recent regulatory events in the US market will likely continue to drag on the broader Change business, and we estimate it would now take a number of years to achieve profitability in the region," said Tony Sheehan, CEO of Change Financial.
The decision to exit the US market is expected to yield cost savings, increasing Change's operating leverage and contributing to profitability.
The financial impact of this move is expected to be minimal, with the company's US revenue comprising a small fraction of its overall earnings.
In FY24, US operations accounted for just US$70,000 ($108,154) in revenue, and Category US-related costs were approximately US$1.6 million ($2.5 million).
As a result of the withdrawal, Change aims to enhance its EBITDA and cash flow.
With over 60,000 active cards in the PaaS platform across New Zealand and Australia, Change Financial continues to prioritise the regions, along with Southeast Asia, as part of its growth strategy.
The company is confident in meeting its target of 30%+ revenue growth and achieving a maiden EBITDA positive result by FY25.
At the time of reporting, Change Financial's share price was $0.068.