With consumers in the US now contributing the most to Afterpay's business, the BNPL provider has set in motion plans to list there as new research shows the economic impact of the service.
Revealed in a quarterly update yesterday, Afterpay is working with external advisors to explore options for listing on a US exchange. The company said it intends to remain headquartered in Australia but listing stateside would help accommodate the growing interest it is seeing from US consumers.
The US is now the biggest contributor to Afterpay's business on a local currency basis, with underlying sales for Q3 FY21 up 211% year on year at $2.6 billion.
For comparison, Australia and New Zealand contributed $2.1 billion. A further $0.5 billion came from the UK, though this was up 277%. Overall, group sales were up 100% on the prior corresponding period.
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At the same time Afterpay announced several major brands will now offer Afterpay in Canada. Retailers including Urban Outfitters, lululemon, Pandora and Shiseido will begin offering the BNPL service in time for the Spring shopping season, Afterpay said.
Afterpay is not working to any specific deadline for the potential listing, which would also be subject to market conditions and other customary listing prerequisites.
The BNPL provider also shared new research conducted by Accenture, revealing the economic impact of Afterpay on both retailers and consumers in 2020.
According to the report, Afterpay delivered $3 billion in net benefits to 48,000 merchants, including $1.3 billion to 38,000 small and medium-sized businesses. Additionally, $510 million of this went to regional businesses and 63,000 jobs were directly and indirectly supported by Afterpay.
Most positively, Accenture found the use of Afterpay saved consumers $110 million when compared to the interest and fees charged on credit cards.
The report also appears to debunk the idea that Afterpay takes advantage of lower income earners, with Accenture finding users are typically younger, female and on higher-than-average incomes. Just 29% of users sit within in the lowest household income bracket, while 48% sit within the two highest brackets.
In a note, Credit Suisse said: "Overall, a generally positive report outlining and quantifying the value proposition of Afterpay's service to merchants. Even if the benefits are potentially a little overstated (they are based on extrapolation of survey responses and it's an Afterpay commissioned report), they are very material to merchants."
Following the results, Morgans lowered its FY21-22 forecasts by 7%-8% on slightly lower sales growth but still recommends investors hold the stock.