Insights 25th August 2021
Zip soon to be the biggest BNPL provider on the ASX? | Zip (ASX:Z1P) Reporting Results
Australia’s second biggest BNPL company reported its 2021 financial year results, here’s what you need to know.
Zip’s cash transaction margin came in at 3.5%. This is a key performance metric, which shows that Zip saw a 0.3% drop in the money it makes from transactions (compared to the same time last year, when its cash transaction margin was 3.8%). Comparing this metric to Afterpay, Zip’s direct competitor, Afterpay (ASX:APT) today reported its net transaction margin as 2.1%. That is a 0.2% drop from the same time last year, when its net transaction margin was 2.3%.
Zip’s total yearly loss after tax fell over 3,100% to a loss of $652 million. The market expected a loss of $206 million.
Zip has completed its acquisition with Quadpay. The BNPL company has also begun offering its services in the UK, Canada and Mexico, and has established entry into Europe and the Middle East. Zip also plans to takeover South African BNPL provider Payflex.
Zip’s revenue rose 150% to a record $403 million.
Zip’s future outlook looks positive. The company’s global presence now contributes 46% to revenue, and Zip says global revenue will be the biggest growth driver in this financial year. Zip will also leverage off its key partnerships with Facebook and eBay.
The market has reacted with Zip shares rising 0.8% to $7.38 so far today. Z1P shares are up 39% this year so far.
Zip is a Citi (PT $8.90), Ord Minnett (PT $10.50), and Morgans BUY stock. Meanwhile, Macquarie (PT $6.15) and UBS (PT $5.60) have Zip as a SELL.