Zip shares are down after reporting its FY21 result
The post The Zip (ASX:Z1P) share price is down despite revealing major global growth appeared first on The Motley Fool Australia. –
Global gains in FY21
Overall, Zip reported that revenue increased 150% to $403.2 million and total transaction volume increased by 176% to $5.8 billion.
It was the US segment that delivered a substantial amount of the growth. US revenue growth was 269% (pro forma) to $176 million. Transaction volume growth was 225% (pro forma) to $2.45 billion.
The UK, where Zip recently launched, saw revenue of $1.8 million and transaction volume of $25.2 million.
ANZ saw revenue and transaction volume growth of 40% and 52% respectively, to $214.5 million and $3.24 billion.
Zip said it’s executing on its global strategy. It’s now operating across 12 months in five continents, with the official additions of the US, the UK, Canada and Mexico, plus regional market entry points in Europe, the Middle East and Southeast Asia.
The buy now, pay later business also revealed that it has agreed to acquire the remaining shares in the South African buy now, pay later business, Payflex. Zip explained that Payflex has access to a “sizeable underbanked, young and fast-growing African population”.
What other factors from FY21 could be impacting the Zip share price?
Zip released some information about its profitability.
The company said that it maintained strong unit economics while investing for, and delivering, strong growth. The cash transaction margin was 3.5%.
Management also stated that the business has delivered a strong credit performance in light of COVID-19, driven by repeat customer usage and investments in its decisioning capabilities. Net bad debts as a percentage of transaction volumes were 1.28%.
Zip’s receivables book was recycling approximately every three months on a blended basis.
It saw a $22.9 million loss of earnings before tax, depreciation and amortisation (EBTDA).
Zips’s bottom line was a loss of $653 million.
The Zip managing director and CEO Larry Diamond said:
The trend and shift away from the unfriendly world of credit cards that was the genesis of the Australian business has proven to be a global phenomenon, and Zip continues to accelerate in all our key markets. This global play supporting consumers and global retailers alike, provides a real point of difference as we strive to fulfil our mission to become the first payment choice everywhere, every day.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.