How did the US customers save Zip in 1Q24?
Let's focus on the key metric that is important for the sake of simplicity: total revenue.
In 1Q23, revenue was $163.2 million.
In 2Q23, revenue was $188.0 million. (Seasonal)
In 3Q23, revenue was $182.1 million.
In 4Q23, revenue was $193.8 million.
In 1Q24, revenue was $204.4 million.
In 2Q24, revenue was $225.6 million. (Seasonal)
In 3Q24, revenue was $219.2 million.
For 7 consecutive quarters, the revenue has steadily increased, despite customer numbers not really increasing during this entire period. You mention losing customers, but the customer numbers are roughly the same as far as I'm concerned.
As far as I can see, there is nothing particularly special about 1Q24 - the company has just steadily been increasing over time.
It appears your main concern is that you think existing customers can't spend more. Transaction volume in the most recent quarter was $2.4 billion, and transaction numbers were 17.9 million. And customer numbers were 6.0 million. That means in a 3 month period, on average, each customer only used BNPL 3 times, and spent a total of $400. That is a very small amount of money to spend across a 3 month period, particularly when you consider that in the US customers only spent $278 USD in that 3 month period on average. Customers could easily spend 10x that amount via Zip - and I'm more than happy for them to increase the credit limits for trustworthy customers which I'm sure they are already doing.
I agree that at some point Zip will need more customers to continue growing its revenue each quarter - but I believe that point is at least 12-18 months away, and unlikely to be an issue in 1Q25 as you have predicted.
If you follow the trend of the last 7 quarters revenues as I've outlined above, the revenue appears to be increasing by approximately $10 million each quarter. So if this trend continues, we can expect 1Q25 revenue to be approximately $230 million. Will you be happy with that outcome?
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