Ann: 2Q FY24 Results Update and interim 1H24 Results Update, page-65

My thoughts on the report:

Glad to see they met their forecast of being cashflow positive for 1H24.

Revenue margin decreased compared to 1Q24 (presumably due to the massive growth in the US which is lower margin) but all other numbers improved – including an extra 200k new active customers.

Only $61.9 million left in senior convertible notes – huge improvement over where it was a year or two ago!

Cash and liquidity increased by almost $30 million – should reduce fears regarding capital raises.

Growth in the US is on fire! Huge revenue increases (35.5% YoY and 19.5% QoQ). And US finally has more revenue than ANZ! Huge TTV increases (32.3% YoY and 24.7% QoQ) and transaction numbers (29.2% YoY and 22.4% QoQ).

Australia has decreased TTV and transaction numbers compared to 2Q23, but revenue up 20.4% YoY - so making a lot more money without requiring as much money being spent by their customers.

Merchant growth still slower than I’d like in the US (1.0% YoY and 0.3% QoQ).

Solid reduction in group net bad debts to 1.74% from 1.99% last quarter.

In the US, Monthly Transacting User (seems like a new metric) was up 9.9% YoY and transactions per MTU up 17.7% YoY – so more customers using Zip each month and spending more often which is great. Wouldn't mind seeing this metric for ANZ market as well.

Seems like the physical card is doing amazingly well in the US – great to see! Makes sense as I think their payment platforms in the US are a bit behind the times with tap and pay etc.

Australian active customers still decreasing – likely as a result of an effort to reduce bad debts. Solid reduction in Australian bad debts to 3.64% from 4.18% the previous quarter. If they can continue to reduce their bad debts their margins are going to be amazing!

Looking forward to seeing how the new Zip Plus product and the Google partnership does over the coming year. Also Pay in 8 being rolled out throughout the US which should be interesting.