Australia’s Afterpay first quarter income greater than doubled on account of US progress

© Reuters. FILE PHOTO: A logo for the Afterpay company is seen in a shop window in Sydney

By Nikhil Nainan

(Reuters) – Australia’s Afterpay Ltd announced on Wednesday that underlying sales more than doubled in the first quarter, aided by strong growth in the US, where the company that buys now and pays later within Almost 1 million new customers were added in three months.

Afterpay’s US business grew the second fastest of any region for the quarter. The underlying turnover there has more than tripled compared to the previous year to 1.6 billion AUD (1.14 billion USD).

The results highlight the United States as the biggest award in the sector, but Afterpay faces intense competition there from Swedish Klarna and more established financial companies like PayPal Holdings.

Afterpay is arguably Australia’s hottest stock this year, having 11.2 million active customers as of late September, 1.3 million more than three months ago.

Afterpay stocks rose 8.2% to A $ 103.8 by noon as the broader market fell.

The COVID-19 pandemic has accelerated the shift to online shopping and deepened the appeal of alternative loan companies that offer small, interest-free installment loans to buyers.

While some analysts said the US numbers were a slight failure, Citigroup (NYSE 🙂 and UBS said that Afterpay’s underlying revenue was ahead of their forecast for the first half as the December quarter tended to favor higher spending.

According to Afterpay, there was an average of 15,000 new customers per day in October, compared with 12,500 per day in the quarter.

Underlying total revenue for the three months ended September 30 was A $ 4.1 billion compared to A $ 1.9 billion for the same period last year.

The company added that its global expansion plans were well advanced in parts of mainland Europe and Asia.

Afterpay last week announced plans to diversify its product options in Australia by offering savings accounts through Westpac Banking (NYSE 🙂 Corp alongside budgeting tools and other services that analysts believe could be used globally.

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