Afterpay Posts Loss Despite Mushrooming Sales
Buy-now, pay-later giant Afterpay has posted a net transaction loss of $132.6 million despite almost doubling sales over the past year.
Afterpay, which is set to be acquired by US payments company Square, reached 16.2 million active subscribers in FY21 – up 63 per cent from the previous year – and saw underlying sales grow 90 per cent to $21.1 billion.
Despite this, however, as well as a 90 per cent increase in total income to $822.3 million, the company posted a net transaction loss of 0.6 per cent of underlying sales due in part to higher marketing expenses as it expands into new markets. EBITDA was $38.7 million, down 13 per cent from FY20.
“This was a strong result notwithstanding the effects of COVID-19, the growth in new active customers, and increased contribution from newer regions as compared to the more mature ANZ region,” said Anthony Eisen, co-CEO and managing director of Afterpay, in the company’s ASX announcement.
North America overtook Australia and New Zealand in total sales, with a growth of 177 per cent to $9.8 billion as compared to ANZ’s growth of 44 per cent to $9.4 billion. The ANZ region accounted for 45 per cent of group underlying sales, compared to 60 per cent last year.
“In Afterpay’s most established ANZ region, the top 10% of consumers are now using Afterpay more than 60 times per year.
“International regions continue to follow the ANZ trajectory with both NA and Clearpay recording increases in consumer frequency during the period,” said Eisen, adding that around 93 per cent of FY21 underlying sales came from repeat customers.
Afterpay shares opened slightly lower at the news, down 0.79 points on the ASX. The takeover by Square is expected to close in Q1 of the 2022 calendar year.