The Splitit Ltd (ASX: SPT) share price is up 3% after the company reported its FY20 half year result.
Splitit’s strong growth
Splitit reported its FY20 half year result today.
The buy now, pay later business reported that it saw year on year growth of 133% of its merchant sales volume (MSV) to US$89.1 million. This helped grow gross revenue by 244% year on year to US$3.1 million. Interestingly, the average order value rose by 59% to US$845.
Splitit revealed that it grew its 12 month active merchants by 92% to 519 and its 12 month active shoppers rose by 28% to 149,000.
Some of the latest merchants to be signed after the end of the period were: The Hut Group, Specialized, Frederique Constant, Echelon Fitness and 77 Diamonds.
During the half year Splitit announced key partnerships with Stripe, Visa and Mastercard during the reported half to accelerate its growth.
However, due to the buy now, pay later business model and the fact that Splitit is in its heavy growth phase, the net loss worsened by 134% to US$9 million.
Summary
The company is expecting continuing strong growth over the second half as its new partnerships and new merchants help increase its accessibility to customers.
The reported growth was impressive in percentage terms. But for a business with a market cap of over $700 million, its gross revenue is small. Perhaps it can go on to follow the type of growth trajectory of some of its competitors. But I’m not sure if it can be a huge winner when others like Afterpay Ltd (ASX: APT) have already cemented their position in the market.
If I were a shareholder I’d be happy with the progress made. Maybe it will be able to deliver huge shareholder returns over the coming years. I’d prefer to buy ASX growth shares like Pushpay Holdings Ltd (ASX: PPH) though.