The Splitit Ltd (ASX: SPT) share price is on watch today after revealing its FY20 fourth quarter numbers.
Splitit is one of buy now, pay later operators that are listed on the ASX.
FY20 Q4
Splitit said that its merchant sales volume (MSV) grew strongly, up 218% year on year to US$86.3 million. The company said that it continued to scale with MSV processed in the whole of this quarter equivalent to the MSV processed over the whole of FY19.
The average order volume (AOV) increased by 24% year on year to US$1,069.
The company’s gross revenue increased by 359% year on year to US$2.9 million, surpassing the total revenue in FY19.
Looking at other statistics, Splitit added another 70,000 of shoppers, reaching 432,000 total shoppers at the end of the quarter.
Some of the brands that have recently been added include Quiksilver, Billabong, DC shoes, Puffy, Ghostbed and Cowboy Bikes. Self-onboarding is now available in over 100 countries.
Splitit also said that there has been a strong start to the first quarter including the Google partnership in Japan. It said there had been “3x MSV growth in January year on year” with ongoing growth in its core verticals including homewares, outdoors and fitness.
Management comments
Splitit CEO Brad Paterson said: “The fourth quarter was an exceptionally strong period, which included a record Black Friday and Cyber Monday. In addition to strong MSV growth, we saw a revenue acceleration as more merchants adopt our funded merchant model. Our focus on innovation to deliver the best shopper experience is paying dividends for merchants who enjoyed improved cart conversion, further supported by our new Flex Fields technology. 2021 has started well with strong MSV in January and becoming Google Japan’s first partner for instalment payment solutions.”
Summary thoughts
Splitit continues to grow strongly, with MSV rising rapidly. Compared to other competitors, it’s a much smaller player. Quarterly gross revenue of US$2.9 million isn’t much – but if it keeps growing at triple digits for a long period of time then it could grow into its valuation.
A key question will be what profit margins Splitit can deliver over time. However, with so much growth expected from the company I’m not sure I could buy in today.
Instead of Splitit, I suggest getting a free Rask account and accessing our full stock reports. Click this link to join for free and access our analyst reports.
