Zip’s (ASX:Z1P) trading update for FY21 YTD shows impressive growth

  • November 23, 2020 12:20 PM AEDT
  • Hina Chowdhary
    Director, Equities Research Hina Chowdhary
    1706 Posts

    Hina Chowdhary is the Director, Equity Research at Kalkine and has an extensive experience of about 15 years in the area of Research, which includes 5+ years in Equities Research particularly.She has earned a Master of Science degree from the renowne...

Zip’s (ASX:Z1P) trading update for FY21 YTD shows impressive growth

On 23rd November 2020, Zip Co Limited (ASX:Z1P) revealed its trading update for the first four months of FY21. Zip clocked A$27.6 million October revenue which is a 90% jump from the October 2019. While the total FY21 YTD revenue stood at A$96.7 million, again a 91% jump seen vs pcp.

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The share price of Zip inched higher by 5.5% in the early session and made a high of A$6.52; however, it is trading almost flat at $6.24 (as of 11:36 AM AEDT). The stock has been moving in a tight range of $5.61 - $6.52 in November 2020 so far, and the last six-month return stands at almost 68%.

Success Story

Australia and New Zealand (ANZ) contributed highest to the revenue, A$16.2 million in October and A$61.9 million in FY21 YTD. However, the USA has witnessed the highest growth in the revenue at 264% in October and 345% in FY21 YTD vs the ANZ growth of 42% and 44%, respectively.

The success story continued in the growth of Merchants on the platform. The total addition of 36.5k merchants in the FY21 YTD increased by 74% pcp, and majorly contributed by ANZ market, up to 28.5k. The USA market contributed only 8.0k to the total addition but accounted for a massive 433% growth vs the ANZ market growth of a mere 46%.

More than two times jump was recorded in the customer growth, which stood at a massive 4.8 million, contributed by 2.3 million from ANZ and 2.5 million from the USA. Here again, the USA’s massive growth of 257% outpaced ANZ’s growth of 44%.

The company has seen a record transaction in volumes in October 2020 of A$401.1 million, notching up by 104% YoY. This added up to the total FY21 YTD volume of A$1.3 billion, a 98% uptick. The ANZ market clocked 60% higher volume with A$240.5 million in October 2020 and the USA clocked 246% increased with A$160.6 million in the same period.

These transaction volumes were backed by even better growth in the number of transactions on the platform. Out of the total of 7.7 million transactions being executed in FY21 YTD, 2.4 million transactions were recorder in October 2020 alone., registering a 140% growth in the month.

The ANZ market clocked 2x number of transactions at 1.4 million in October 2020, and the USA garnered 233% uptick with 1.0 million transactions. For the FY21 YTD, ANZ took the lead with an absolute number of transitions at 4.7 million transactions, a 74% growth. While the USA led with the growth of 329% with 3 million transactions.

ALSO READ: Zip, Afterpay welcome ASIC’s BNPL report

Miscellaneous Updates

The App remained to be a highlight, finishing at 25th position on the app store in the USA in shopping category with 328,000 downloads in October. November so far has also registered 15,000 downloads, and total downloads crossed 5 million mark in the country.

During the FY21, the company became the first player to launch the Google Chrome extension to allow customers to pay later on any website utilising unique virtual card technology.

In Australia, Zip also worked with Visa and launched “Tap & Zip”, enabling users to shop effortlessly anywhere that accepts Visa.

RELATED READ: Zip Co (ASX:Z1P) Reports 88% Growth in the September Quarter



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