Afterpay Ltd (APT)

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25 February 2021

Results 

Half Year 2021

Half Year 2020

Change

Total Revenue ($m)

417.2

220.3

+89%

EBITDA (ex significant items) ($m)

47.9

7.7

+521%

EBITDA ($m)

(49.1)

(14.1)

-248%

Loss After Tax  ($m)

79.2

31.5

-151%

Underlying Sales ($m)

9,818.1

4,758.0

+106% 

Active Customers (millions)

13.1

7.3

+80%

Active Merchants (‘000s)

74.7

43.2

+73%

Afterpay (APT) continues its evolution into an international brand          

What happened?

  • Buy now pay later provider Afterpay (APT) has reported a first half (1H FY21) loss after tax of $79.2 million. The loss after tax increased by $47.6 million, compared to the previous corresponding period (pcp) driven mainly by losses on financial liabilities totalling $64.8 million.
  • Total revenue came to $417.2 million for the half year, up 89% compared to the pcp. Earnings before interest, tax, depreciation and amortisation (EBITDA) excluding significant items was $47.9 million for the half, an increase of $40.2 million. No dividend was declared.
  • APT announced it will be raising as much as A$1.5 billion, by issuing convertible notes. The funds will be used to increase its ownership in APT US, taking the stake in the US business from 80% currently, to 93%.
Why did it happen?
  • APT’s is made up of 5 key businesses. Afterpay Asia Pacific (platforms in Australia, New Zealand and Asia). Afterpay North America (platforms in the US & Canada.  Clearpay (platform in the UK); Pay Now (Mobility, Health and e-Services; & Corporate) and Corporate (expenses that are not attributable to the Afterpay, Clearpay or Pay Now segments.
  • In simple terms APT’s result was driven by a growing customer base, who use the APT platform more frequently. Additionally, there were more merchants offering APT’s services. These themes saw strong growth across all of APT’s geographies. As a result underlying sales more than doubled over the half, totalling $9.8 billion, an increase of 106%. Adding greater momentum to the acceptance by customers and merchants of APT’s platform, was the accelerated growth in digital commerce as consumers responded to the COVID-19 pandemic.
  • North America became the largest contributor to underlying sales in the second quarter (Q2) FY21. International regions outside ANZ contributed 51% to Underlying Sales for the half year, compared to 34% in the pcp. The number of APT’s customers grew strongly in the period, with the group now laying claim to 13 million active customers, marking an increase of 80% compared to pcp. In addition, the average number of orders per active customer continued to grow, particularly in the ANZ market, where transaction frequency was 30% higher than the prior half. The growth in transaction frequency, combined with the increase in active customers, were the catalysts driving underlying sales higher by 106% for H1.
  • Active Merchants reached almost 74,700 by the end of the half year, an increase of more than 31,000, or 73%, on the prior half year.

Where to now?

  • Noteworthy was the fact APT offered no guidance on how the second half of the year had started, although the result highlighted that substantial momentum generated within the business in the first half. The question now turns around APT’s ability to continue executing at a high level as it expands its foot print into other geographies. 
 

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