Alternative Metrics, page-3593

This is not correct. Due to the short term nature of their receivables book, the majority of the company's bad debts expense occurs as write off during the course of the year with the remainder being the provision against uncollected receivables at year end (detailed in Note 6 to the accounts). There is no "skewing" occurring.

Yes, once the money has been advanced, whether it is collected does depend on the customer. APT can influence this outcome by only advancing to a less risky cohort of customers which it does via its credit algorithm which rejects something like 40% of initial applicants. The majority of Afterpay's bad debts are incurred to first time customers (essentially a customer acquisition cost) however as the customer base becomes more mature this bad debts expense reduces considerably (as a percentage of GMV). This is demonstrated by the highly profitable ANZ business which had an incremental EBITDA margin above 50% between FY19 and FY20 (ie every additional $1 of sales revenue generated over 50c of incremental EBITDA).