Splitit Payments, Sezzle post full year results: How did the BNPL stocks fare?

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Summary

  • BNPL stocks closed the week on a weaker note as investors were inclined to dump loss-making high growth companies.
  • Now, most of the BNPL players have reported results, including Afterpay and Zip Co.  

Technology stocks took a tumble today, dragging the benchmark down as investors were quick to dump the companies that generally do not make any profits. Unfortunately, the information technology sector is brimming with many unprofitable companies burning investor’s money. 

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The buy now pay later stocks are significantly down today. It is now apparent that these companies have reported losses this earnings season as well. As a result, investors and bears have many reasons to punish such stocks on a day when yields are rising. 

In light of the above, let us zero in on two BNPL companies that delivered their earnings updates:

Splitit Payments (ASX:SPT)

Announcing its full-year results for the period ended 31 December 2020, Splitit Payments has reported revenue of $6.7 million, a whopping 309% growth over the previous year. Merchant sales volume reached $246 million, up by 179% over the last year. 

North America and Europe delivered strong growth. During the year, the company expanded acceptance as it on-boarded the world’s leading brands including Canyon Bicycles, Echelon Fit, Specialised Bicycles, The Hut Group, and Quiksilver. 

Copyright © 2021 Kalkine Media Pty Ltd

Loss after tax for the year was $25.47 million, up from $21.46 million in the previous year. Gross profit stood at $1.25 million, up from $1.16 million in the previous year. Total expenses for the year also increased to $25.92 million, compared to $22.63 million last year. 

Interest-bearing liabilities and borrowings stood at around $32 million under current liabilities. But under non-current liabilities, Splitit’s Interest-bearing liabilities and borrowings were around $37.4 million. Cash and cash equivalents stood at $92.82 million. Besides, the company has $220 million in financing facilities. It expects the current facilities to support up to $800 million of annual merchant sales volume. 

SPT last traded at $1.14, down by 3.8% from the previous close. 

Sezzle Inc. (ASX:SZL)

Sezzle Inc. also released full-year results today. The company’s e-commerce strength in the market allowed the business to deliver robust growth. Underlying merchant sales rose 250.8% to $856.4 million. Its total income rose 272.1% to $58.8 million. 

It also added that FY21 has started on a strong note with underlying merchant sales of $117.8 million in January, up 65.1% over the average monthly number of 2020. The total income figure was largely driven by merchant fees. 

Gross profit for the year was $36.29 million against $8.14 million in the previous year. Operating expenses stood at $64.23 million compared to $19.39 million in the previous year. Sezzle’s net loss widened to $31.89 million from $13.06 million in the previous year. 

Its provision for uncollectible accounts rose to $19.58 million compared to $6.23 million in the previous year. The company had cash and cash equivalents of $84.28 million at the end of the year. Sezzle expects to clock an annualised run rate in excess of $2.5 billion by 2021. 

SZL last traded at $9.7, down by 2.9% from the previous close. 

(All currency in USD, except share price)

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