Zip (ASX: Z1P) has announced its September 2019 quarter update, revealing another three months of good month.
Zip Co provides customers with a revolving line of credit to finance their retail purchase with its brands of Zip Pay, Zip Money and Pocketbook. It is one of the largest buy now, pay later providers in Australia. Some of its largest clients include Bunnings Warehouse, Appliances Online, EB Games and Officeworks.
What Did Zip Report?
Its quarterly revenue grew by 15% compared to the June 2019 quarter to $31 million, with receivables also up 15% to $783.6 million over the quarter.
Zip also revealed that during the September quarter it added 147,000 customers. Year on year, quarterly transaction volume grew by 111% to $402.1 million.
Management were pleased to report it remained cashflow breakeven despite all of the investing. The company said it generated cash EBTDA (which is EBITDA without the I – click here to learn what EBITDA means) of 1% of average quarterly receivables.
It also said that it achieved “market-leading” credit performance of 1.68% of net bad debts.
Acquisitions
During the quarter it entered into an agreement to acquire global instalment technology platform PartPay, which provide exposure to four key geographies of New Zealand, United Kingdom, United States and South Africa.
It increased its investment in US buy now, pay later provider QuadPay to 15% and it also acquired SME lender Spotcap Australia and New Zealand, fast tracking the launch of the Zip Biz BNPL product.
New Customers
Some of the newest additions to the platform include Woolworths’ (ASX: WOW) Big W, Carsales.Com (ASX: CAR), Bailey Nelson, Sass & Bide and T2 Tea.
Management Comments
Zip Managing Director and CEO Larry Diamond said: “Although there remains a large addressable market opportunity here in Australia which remains a continued focus, the global phenomenon of BNPL is underway, and it is critical Zip plays a future role in its growth story.
Is The Zip Share Price A Buy?
Investors have sent the share price down 4% in early trading, so it seems the market isn’t exactly impressed.
I prefer Zip in the BNPL sector because of its strong operational performance, ongoing domestic growth and now it can grow overseas. But I’m not sure I’d want to buy shares today because the share price may have grown too much.
For growth it could be better to buy the shares in the free report below.
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