Why Zip (ASX:Z1P) customers nearly doubled in Q2FY21

Summary

  • Zip Co Ltd (ASX:Z1P) on Wednesday released robust trading update for the second quarter of FY21..
  • The buy now pay later (BNPL) firm reported quarterly revenue of A$102 million (up 88 per cent), the December revenue grew 94 per cent to A$40.2 million (YoY).
  • Quadpay’s December transaction volumes exceeded that of November by 7.5 per cent, even with the sales lift from Black Friday and Cyber Monday in November.

In what signals its increasing popularity as a BNPL firm, Zip Co Ltd (ASX:Z1P) on Wednesday released a stellar business update for the December quarter, posting remarkable growth in its revenue, customer base and transaction volume.

The fintech firm nearly doubled its customer numbers year-on-year to 5.7 million in the quarter ended 31 December 2020 (Q2 FY21). The buy now pay later (BNPL) firm reported quarterly revenue of A$102 million (up 88 per cent) while its December revenue soared 94 per cent to hit A$40.2 million (YoY).

Image Source: MegapixlTM

Zip more than doubled its quarterly transaction volume in Australia, recording a growth of 103 per cent (YoY) to hit A$1.6 billion. The December transaction volume stood at A$628.4 million, up 104 per cent from the last year’s corresponding period. The transaction numbers for the quarter were 10.7 million, up 149 per cent. The merchants on the platform rose by 73 per cent (YoY).

Quadpay’s excellent performance

Zip completed the acquisition of Quadpay in the US in June 2020. The BNPL player said that Quadpay was a standout performer in its latest financial results, achieving record transaction volume, revenue, and customer growth. The transaction volume for Q2 FY21 rose 217 per cent (YoY) to US$518.4 million. The December transaction volumes exceeded November by 7.5 per cent, despite the sales boost from Black Friday and Cyber Monday in November 2021. The annualised transaction volume stood at US$2.5 billion.

Image Source: Zip ASX update, 21 January 2021

READ MORE: Zip shares up as it raises over $56 million capital

Company commentary

Commenting on the financial results, Managing Director and CEO Larry Diamond said that the company’s exceptional results had established its position as one of the fastest-growing BNPL players. Th CEO particularly highlighted the stellar results achieved in the US on account of Quadpay’s rapid growth in the largest addressable market for BNPL.

Stock performance 

Zip shares closed at A$5.98, up 0.100 points, or 1.70 per cent on Wednesday, 20 January 2021, against the previous closing on Tuesday, 19 January 2021. The stock is up nearly 7 per cent in January 2021.

READ MORE: Zip (ASX:Z1P) share price surges after deal with AsiaPay. Will the rally continue?

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