The Australian fintech and its global competitors such as Sweden’s Klarna, Affirm and Zip Co have witnessed explosive growth since the pandemic locked down much of the world and turned more people toward online shopping.
Afterpay’s stock has climbed more than 1,500% since March, establishing itself as Australia’s 12th most valuable company.
Afterpay also said it was raising A$1.25 billion ($995 million) through convertible notes in a complex deal to buy out Matrix Partners’ share of its U.S. business - which accounts for 43% of its sales. The United States is also the industry’s key growth market where it tussles with fast-growing Klarna.
Klarna, which is reportedly about to tap more private funding, is posting its full-year results later on Thursday.
Afterpay’s statutory loss more than doubled to A$79.2 million as robust growth of its UK business pushed the unit’s valuation higher and raised the value of a put option held by another company. Zip also posted a significantly bigger half-year loss after buying out New York-peer Quadpay.
While Afterpay’s gross transaction losses fell to 0.7% - suggesting fewer customers were missing payments - margins also slightly fell to 2.2% from six months ago.
The value of transactions done through Afterpay hit A$9.8 billion in the six months to Dec. 31, twice that of the A$4.8 billion processed a year ago, supported by strong holiday shopping.
Active customers shot up 1.9 million to 13.1 million in the three months to December.
($1 = 1.2547 Australian dollars) Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Maju Samuel