June 30th today, for me that means scraping some more information re. Afterpay online for the end of the month and also gives me some insight into the latest quarter prior to the announcement next week. Here is my analysis:
Merchant Growth (not store count)
AUS: +919 merchants (20% growth in quarter)
NZ: +100 merchants (100% growth in quarter)
US: +36 merchants (launch on US site 14 more announced and in pipeline)
View attachment 1171716
Comments:
- AUS growth continues into the SMB space, continuing to diversify into other areas. For example 'Dreamworld' have just come onboard.
- NZ growth is pleasing IMO, rate of merchant growth has accelerated, this acceleration has occurred after Afterpay partnered with Vend POS software. I was initially disappointed in NZ, but things seem to be picking up and other members convinced me not to be that concerned with it.
- Another 21 merchants launched on US site in June, from social media announcements a few more are joining the platform but aren't in the directory yet. 50 were announced so 14 more to go.
Instore Merchant Growth:
AUS: +25 merchants (27% growth in quarter)
NZ: +11 merchants (550% growth in quarter)
Comments:
- AUS instore rollout continues, it's mostly in the fashion space, but if it follows the same path as online we will see diversification later.
- APT was only launched in NZ in 2017, so the rollout of instore already in NZ bodes well for the timeframe in new and future markets. This quarter went from 2 to 13 instore merchants, with some large retailers onboard (Country Road, Supercheap Auto, Pandora)
Customer Reviews:
Trust Pilot: 114 new reviews with a 0.3 improvement in overall score to 7.5 / 10
Product Review: 160 new reviews with a 0.1 improvement in overall score to 4.2 / 5
Apple App: 1,895 new reviews with a 0.2 improvement in overall score to 5 / 5
Android App: 1,192 new reviews with no change in overall score of 4.7 / 5
View attachment 1171710
Comments:
- Customers love Afterpay, it's not deteriorating as the company grows. People love it enough to take the time to leave a positive review of it.
Social Media:
Facebook likes:+29,191 new likes on AU site (up 23%)
Instagram followers: +3K on AU account (up 14%)
#afterpay: +59,644 (up 24%)
View attachment 1171722
Comments:
- in Q3 FB likes grew 8%, so Q4 saw a massive jump on that. It will be interesting to see the customer growth APT reports for the quarter. If people like the group on FB when they become customers then this quarter looks good.
US Launch Commentary:
- Everything looks pleasing at this stage, 36 merchants online, more coming. Social media team doing there thing on Instagram.
- If they execute well they will blow the competition out of the water, and it won't be worth mentioning them.
@mal85's great commentary about Sezzle mentioned they have copied APT's model, however they don't seem to be able to do a better job than APT in executing that model (it isn't easy to copy successfully). Google trends show APT are swatting Sezzle away especially in the NY and California markets.
View attachment 1171701
- Starting to get some customer engagement, this post asked US followers to name merchants who should be onboard - some mentioned were GAP, Nike, Sephora (already in AUS), American Eagle,
View attachment 1171713
Personal Commentary
- I'll continue to hold.
- Would I buy in at this point if I could (I bought a house so capital is scarce)? I would wait for the quarterly and FY results to provide some insights into the financial position of the company before wading in at close to 52 week highs. In particular have losses gone up. I may also wait for a further indication of US progress if I was cautious, however the amount of tweets mentioning UO and APT is an indication that it's good.
- Re. the next quarterly update by the company in a week or so - I think customer growth will be above 2.1 million, in store numbers will be above 10,000 stores, average customer spend will have rebounded in the quarter (~$330) and US numbers if mentioned will be off to a good start. If the mention NZ, then I'll be happy with an update on that (they are always quite regarding it).
Each month I hold I'll continue to track these metrics to continue whether my investment thesis is still supported - continued growth in merchants, continued generation of network effects, continued customer 'love'. I am focussing particularly on the US situation as I believe that will drive growth.
So far, so good.
...
Some data I track (i.e. similar web) will be coming out in the next few days so either myself or others will post about it.
