$2 party !!, page-88

hahahaha. long way off a dividend, sorry to tell you. Or maybe you were being tongue in cheek...

some analysis I did, which I posted on another thread.

Active customers per merchant

• Afterpay has 43,200 merchants (based on half year report) and 7.3m active customers = 169 active customers per merchant on average

• Splitit 720 merchants and 118,783 active customers = 165 active customers per merchant on average.

This suggests that the active customers per merchant is similar (about 2-3% off), it also suggests that at this current rate, it's not active customers that is the problem, it's number of onboarded merchants!

Revenue per activecustomer

• Afterpay - 220m/7.3m = $30

• Splitit - 2.38m (converted USD of 1.65m to AUD) / 118,783 = $20

Gross profit per activecustomer

• Afterpay 0.75 x $30 = $22 (or adjusted for 21% bad debts 0.53 x 30 = $16. I note this is not the proper way to work out gross profit, but I thought it fair to show how bad debts can differentiate both models)

• Splitit 0.71 x $20 = $14 (Splitit doesn't wear the bad debts risk)

From this analysis, you can see that onboarding and activating merchants is key (assuming that with marketing activities etc, customer uptake per merchant is similar to Afterpay); and maintaining (or even improving) high gross margins to cover opex and return value to shareholders is also important.

They have a steep uphill battle to eat into the market share. In this sort of industry, playing catch-up is tough. In comparison, SPT has 1.6% of the onboarded and active merchants as APT, for example. More details on how Visa and Mastercard will accelerate global expansion and merchant onboarding is critical. I'm assuming management is still figuring this out and negotiating the details.

Also, if you're interested on updated revenue and margin analysis based on most recent business update announcement, if you go back to one of those threads I have broken down some analysis, for those of you interested in the fundamentals (I'm assuming that's very few, based on the comments in the forum over the past couple of days).