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Afterpay Reports Record Sales in Q3 2021
Wednesday, April 28, 2021
SAN FRANCISCO, April 20, 2021 /PRNewswire/ -- Afterpay Limited (ASX: APT) today announced that its underlying sales are up 123% from a year ago on a constant currency basis(1) for the quarter ending March 30, 2021 (Q3 FY21). Based on Q3 FY21 performance, North America(2) (NA) is now the largest contributor to underlying sales and outperformed the seasonally strong Q2 FY21 on a local currency basis.
Key Highlights(3)
-- Strong operating performance in Q3 FY21 across all regions with
underlying sales up 104% on the prior corresponding period (pcp).
-- Quarterly performance on a constant currency basis was 123% higher than
Q3 FY20.
-- Q3 FY21 underlying sales in the United States (US) and United Kingdom
(UK) were up 211% and 277% respectively on Q3 FY20 on a local currency
basis.
-- Based on Q3 FY21 performance, North America(4) (NA) is now the largest
contributor to underlying sales and outperformed the seasonally strong
Q2 FY21 on a local currency basis.
-- March 2021 exceeded December 2020 and delivered the second highest
monthly underlying sales ever recorded, with the US becoming the first
region to record more than $1b in underlying sales in a single month.
-- Active(5) customers globally increased by 75% to 14.6m (up from 8.4m in
Q3 FY20), with NA and the UK reaching 9.3m and 1.8m active customers
respectively.
-- Customer acquisition has continued to gain momentum in April, with a ~6%
increase in the daily average number of new customers in the month to
date (April) compared to the Q3 FY21 average.
-- Active(3) merchants increased by 77% to 85.8k (up from 48.4k in Q3
FY20), with a number of major enterprise retailers launching across all
regions during the period.
-- Strength of Afterpay's Shop Directory continued to drive value for
merchants, with an average of ~31m lead referrals generated per month to
retailers in Q3 FY21. Afterpay sent ~35m leads to its global retailers
in March alone.
-- Network effect of Afterpay's platform continues to drive increasing
customer frequency across all regions. The top 10%(6) of customers
globally, on average, now transact 33 times per year (or ~3 times per
month).
-- US - 23 times per year, ANZ - 62 times per year, and UK - 29 times
per year.
-- ANZ in-store volumes continue to recover and are now tracking near to
pre COVID-19 levels at approximately 24% of ANZ underlying sales. The
rollout of in-store in the US continues to progress well with a number
of new retailers coming live post H1 FY21.
-- Underlying sales from the global Afterpay Day sale(7) increased ~117% on
the same period last year and was 36% higher than the August 2020
Afterpay Day sale.(8)
-- The March Afterpay Day sale drove a 40% increase in new active customers
globally, generated nearly 6m referrals to merchants from the Afterpay
Shop Directory and saw an average increase in basket size of ~10%.(9)
-- Merchants with over $1.5b of total addressable online sales are live,
integrating or signed in the EU following the completion of the Pagantis
acquisition and launch of Clearpay across Spain, France and Italy in
March 2021.
-- The Afterpay App was downloaded more than 2m times during Q3 FY21 with
~1m downloads in March alone.
-- The recently launched partnership with global payments platform Adyen
(AMS: ADYEN) means merchants that use Adyen in all regions (NA, UK and
ANZ) can now offer Afterpay to their customers.
-- Merchant revenue margins (unaudited) remained firm in Q3 FY21 and
continued in line with what was achieved in the six months to 31
December 2020.
-- Gross losses(10) (unaudited) continued to remain below historical rates
in all operating regions. Net Transaction Losses (unaudited) as a
percentage of underlying sales likewise remained low for the quarter.
-- As per the announcements made by Afterpay during Q3 FY21, Afterpay
settled A$1.5b zero coupon convertible notes that are due in 2026. The
proceeds from the notes were partly used to fund an increase in
ownership of Afterpay US, Inc. As announced in April 2021, Afterpay's
underlying interest in Afterpay US, Inc. has now increased to
approximately 91%, following completion of the tender offer made to
eligible participants under the Afterpay US, Inc. 2018 Equity Incentive
Plan, combined with the 3.5% underlying interest the Company recently
acquired from Matrix.
Exploring options for a potential US Listing
-- Afterpay is currently working with external advisors to explore options
for a US listing given the US market is now the largest contributor to
our business and is expected to continue to grow strongly.
-- While Afterpay intends to remain an Australian headquartered company,
our shareholder base is increasingly becoming more globally focused. A
US listing would further accommodate this growing interest.
-- There is no timeline set for a Board decision on a US listing and any
listing would be subject to market conditions, approval by a US exchange
and satisfying a number of other customary listing prerequisites.
Economic Impact Report
-- New research by Accenture has revealed the economic impact of Afterpay
on the Australian economy including job creation, driving additional
business for retailers, supporting the local fashion industry, and
helping consumers to avoid credit card fees.
-- $6b in incremental sales for retailers and more than $3b in net
benefits for 48,000 Afterpay merchants in Australia, including
38,000 small and medium-sized businesses.
-- $1.7b in sales for small and medium business owners, of which $1.3b
were incremental.
-- $510m in sales for regional businesses.
-- 63,000 jobs, direct and indirect, supported by Afterpay.
-- $110m in savings for consumers when compared to credit card interest
and fees.
-- The report can be accessed here:
https://corporate.afterpay.com/investors/reports-presentation
Business Performance
Q3 FY21
GLOBAL
(unaudited) Q3 FY21 Q3 FY20
VARIANCE
--- ---
Underlying
Sales
(A$)
$5.2b
$2.6b 104%
--- ---
North
America
$2.6b
$1.0b 167%
--- ---
ANZ
$2.1b
$1.5b 48%
--- ---
UK
$0.5b
$0.1b 246%
--- ---
Underlying
Sales
$5.7b
$2.6b 123%
(on a constant
currency basis)
--- ---
GLOBAL
(unaudited) As at As at
VARIANCE
31 MAR 2021 31 MAR 2020
--- ---
Active
Customers 14.6m 8.4m 75%
--- ---
North
America
9.3m
4.4m 112%
--- ---
ANZ
3.5m
3.2m 9%
--- ---
UK
1.8m
0.8m 134%
--- ---
Active
Merchants 85.8k 48.4k 77%
--- ---
North
America
23.2k
9.1k 154%
--- ---
ANZ
57.7k
38.6k 49%
--- ---
UK
5.0k
0.6k 672%
--- ---
North America
-- Underlying sales in North America increased by 167% compared to Q3 FY20.
The US was up 211% on a local currency basis.
-- March underlying sales from US in-store imply a current annualised run
rate of over ~$225m (up from $180m reported at the H1 FY21).
-- Afterpay US omni-channel shoppers shop 48% more frequently than
online-only shoppers in the US(11)
-- Afterpay US omni-channel shoppers spend 72% more than online-only
shoppers in the US(5)
-- More than 3.5m US customers have set up the Afterpay Card to shop in
person(12)
-- During the quarter approximately 17.6k NA customers joined the platform
per day with a total active customer base of 9.3m reached. In April to
date, that number has increased to 18.7k per day.
-- Total number of customers in the US that have ever signed up to Afterpay
now exceeds 17m.(13)
-- New merchants that went live, are integrating or contracted during Q3
FY21 include:
-- US Online: VINCE, Vera Bradley, SMITH, Rumble
-- US In-store: Urban Outfitters, Anthropologie, Free People, BHLDN,
Terrain, Bed Bath & Beyond
-- Canada: Shiseido (NARS, Laura Mercier, Cle de Peau, Shiseido),
Pandora, lululemon
ANZ
-- As the most mature region, ANZ sales continued to grow (up 48% on Q3
FY20) with underlying sales momentum for both online (up 49%) and
in-store (up 45%) from Q3 FY20.
-- In-store volumes in Q3 FY21 continued to increase and now represent ~24%
of total ANZ underlying sales, in line with pre-COVID levels.
-- In-store is expected to further accelerate following the launch of the
Afterpay Card (28 March) in Australia. Once customers have set up their
digital Card in the app, they can checkout in-store at any Afterpay
merchant by simply tapping on the payment terminal. In the first three
weeks of April, more than 650k AU customers have set up their Afterpay
Card.
-- During the ANZ Afterpay Day sales, eBay was the most shopped merchant by
both existing and new customers. This marks 12 months of a successful
partnership between the two brands.
-- ANZ SMBs saw an 80% increase in underlying sales against pcp as
customers continued to shop local.(14)
-- New merchants that went live, are integrating or contracted during Q3
FY21 include JB Hi-Fi, The Good Guys, Mwave, Luxury Escapes and
Casetify.
United Kingdom
-- Underlying sales in the UK increased by 246% compared to Q3 FY20, up
277% against pcp, on a local currency basis.
-- The UK performed strongly during the quarter, despite the ongoing impact
of pandemic restrictions during the period.
-- Clearpay announced principal sponsor of London Fashion Week from
February 2021 as part of a new two-year partnership to support the UK
retail industry and give consumers more access to the best of British
fashion via integrated, inclusive shoppable moments and dynamic
interactive concepts.
-- New merchants that went live, are integrating or contracted during Q3
FY21 include: Ann Summers, Public Desire, Conturve, BargainMax, Arne
Clo, Smirk, Cettire, Quiz, EGO Shoes, and Motel Rocks.
Global expansion
-- Following the successful acquisition of Pagantis, Clearpay was launched
in Spain, France and Italy during the quarter. Clearpay is on track to
launch in Germany during H1 FY22.
-- The 100 strong Clearpay EU team has since signed more than 325 brands
including Shein, Romwe, MiMaO, Blue Marlin, MCLABELS, SaladCode.
-- The addressable e-commerce market in the EU exceeds EUR300b(15) ($494b).
Innovation
-- During March, Afterpay customers were able to use the recently launched
'Favourites' feature, enabling them to curate and personalise the sales
by browsing their most-wanted items, adding them to their Favourites and
revisiting them as part of the sales.
-- The launch of Afterpay's partnership with Squarespace has been very
positively received, with some merchants experiencing up to a 33%
increase in monthly sales since the buy now, pay later offering
launched.
Afterpay Money
-- Work continues on bringing Afterpay Money to life with launch expected
in H1 FY22.
-- An internal pilot team is currently working on a skeleton app in
production with functioning deposit and savings accounts, with iterative
prototype testing continuing with customers ahead of launch.
Regulatory update
ANZ
-- The Buy Now Pay Later (BNPL) Code launched 1 March 2021 recognises the
diversity of the BNPL industry, and incorporates scalable standards and
protections to ensure the industry continues to deliver strong consumer
outcomes.
-- Afterpay made a submission to the Payments System Review in February
2021, and remains engaged with the RBA Review of Retail Payments.
-- Afterpay welcomes engagement with ASIC on the forthcoming design and
distribution obligations, and considers itself well-placed to meet the
spirit and intent of this outcomes-based regulatory framework.
UK
-- Clearpay continues to engage with HM Treasury and the UK Government
regarding a proportionate regulatory framework for currently exempted
BNPL products. We look forward to a continued dialogue.
Do the Right Thing
-- During World Earth Month (April), Afterpay is enabling shoppers to
'top-up' by adding a $1 donation at checkout to benefit Magpies &
Peacock, a non-profit design house, and Surfrider, a non-profit
environmental organisation. Afterpay will match every dollar raised for
these worthy causes.
-- Beginning mid-April, Afterpay will launch its first-ever live integrated
shopping experience via the company's website providing shoppers with
the opportunity to learn about sustainable brands driving the circular
economy with eco-friendly fashion and beauty as they watch influencers
shop live from their favorite brands.
-- In March, Afterpay announced its ongoing partnership with leading
Australian not-for-profit Global Sisters; an organisation empowering
women who are experiencing barriers to employment. As well as committing
funding, Afterpay will also be participating in Global Sisters' coaching
program, which partners Afterpay team members with Sisters to offer
mentoring and upskilling as they launch their own businesses.
-- Afterpay continues to work with the Australian Retailers Association to
develop online financial literacy courses specifically tailored for
retail workers during the quarter. The program is anticipated to
commence during Q4 FY21 and will be made available to more than 50k
retailers over the next 12 months.
(1) Constant currency is a non-IFRS measure and has been calculated by translating the results for the quarter ended March 31, 2021 at the effective exchange rates for the prior comparative quarter ended 31 March 2020.
(2 )United States and Canada.
(3) All currency figures are in Australian dollars unless otherwise stated
(4) United States and Canada.
(5) Have transacted at least once in the last 12 months.
(6) Top 10% of customers measured by value of underlying sales contribution over rolling 12 month period to 31 March 2021.
(7) Afterpay Day sales were held across all regions except the EU.
(8) Taking the first two days only, as comparative to the prior year's two day event.
(9) Compared to August Afterpay Day 2020.
(10) Gross loss defined as Afterpay receivables impairment expense.
(11) Since US in-store launch in July 2020.
(12 )As at 31 March 2021.
(13) Since inception.
(14) Percentage growth in order value by dollars.
(15) Source: eCommerce Europe, https://www.ecommerce-europe.eu/research/figures-per-country/
View original content to download multimedia:http://www.prnewswire.com/news-releases/afterpay-reports-record-sales-in-q3-2021-301272314.html
SOURCE Afterpay
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