Beforepay chief executive James Twiss says the pay advance company had a “transformational” year in 2022/23 and is now at the point of producing “sustainable profitability”. The company reported a loss of A$6.6 million and an EBITDA loss of $3.1 million for the year to June but it achieved positive EBITDA in the fourth quarter of the year. Twiss said its “unit economics” have put it on a path to maintain that profitability. Beforepay provided $628 million of short-term loans in the year to June – an increase of 92 per cent over the previous year. The average loan size was $366 and the average term was three to four weeks. Active customer numbers grew by 35 per cent to 234,034. Income doubled to $30.7 million, while operating expenses fell 26 per cent to $18.7 million. The loss expense increased from $8.1 million to $14.2 million. The loss of $6.6 million was an improvement from a loss of $29.1 million in 2021/22. Twiss said the company makes money when its net transaction margin exceeds its operating expenses. The margin is calculated as gross revenue less defaults, finance costs and direct lending costs. In the second half of the year, the net transaction margin was $6.6 million and operating expenses were $8.1 million. In the June half of the 2021/22 financial year, NTM was $3.2 million and operating expenses were $12.6 million. As a proportion of the value of pay advances, the NTM was 1.1 per cent in 2021/22, rising to 1.9 per cent in the year to June. In the June half it was 2.1 per cent. Twiss said the company has got its expenses down by being more selective about how it spends its marketing dollars.  One reason for the improvement in the NTM is a lower loss rate, which fell from 2.4 per cent of pay advances in 2021/22 to 2.1 per cent in the year to June. Twiss said the company tightened its credit standards during the year. He said that if the company maintains an NTM of 2 per cent it will be profitable as its balance builds.