Afterpay Ltd., the Australian buy now, pay later (BNPL) company, reported its fourth quarter (Q4) sales represented the highest quarterly performance ever, reflecting the shift to eCommerce spending since the impacts of COVID-19 emerged globally.
The company, which operates in the U.S., the United Kingdom, and New Zealand, announced its Q4 results Monday (July 13) for Q4 that ended on June 30.
Its strong performance across the business in Q4 delivered sales totaling $3.8 billion, 127 percent above Q4 levels a year ago, the company reported.
“Today’s announcement is the outcome of a lot of hard work and unwavering commitment by a world class team,” said Afterpay CEO Anthony Eisen in a statement. “Given the ongoing impacts from COVID-19 and the uncertain global economic conditions, we have continued to focus on preserving capital and maintaining a strong balance sheet.”
Total sales were $11.1 billion in fiscal 2020, up from $5.2 billion in 2019, a 112 percent increase.
Merchant revenue margins for fiscal 20 are expected to be in line with or better than the first half of fiscal 2020 and fiscal 2019.
Net transaction loss for 2020 is expected to be up to 55 basis points which the company called historically low levels.
As a result of its strong performance, Afterpay said it planned an expansion into Canada with launch expected next year. The company is exploring a number of small mergers and acquisitions to accelerate roll out across potential new international markets. Due diligence is being undertaken, however, and there is no certainty that any deal will be completed.
Last month, PYMNTS reported BNPL companies are enjoying a moment thanks to COVID-19, as shoppers look to stretch every dollar. As BNPL emerged from the Great Recession, that mindset is deeply embedded among those that have taken advantage of point-of-sale installment payments.
“Post-2009, millennials demonstrated a clear aversion to financial risk, especially for lifestyle purchases, resulting in a tangible shift away from credit cards,” Nick Molnar, U.S. CEO and co-founder of Afterpay told PYMNTS. “Today, this trend is repeating itself.”
“We went public when we had about 100 retailers signed on and 30,000 customers, so really early in the process. And we know it was a high-risk move to go public that early, but we saw it as a great path to gaining sufficient liquidity to be able to really keep us in the game and able to grow.”
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