Just some points to add, the company records its net transaction loss (NTL) and net transaction margin (NTM), both figures improved in current report (Page 11). Indicating better risk control than FY2017.
The 32m you referred to, is bad debt provision, not cash written off. In annual report Page 50, the company provides a breakdown of its current receivable structure, and explains its current net provision for impairment is 15.143m. The company's revenue depend very much on its scale, its fee margin is ~4% of transaction, and net transaction loss is ~0.4%, net provision for impairment at current is ~0.7% of total transaction value. So the company still makes a good margin. If you look at the scalability of the company, now it has increased its Australia facility to over 500m, and raise further 100m for international expansion, payment terms are 4 weeks or ~1 month per transaction, so multiplier that by 12, optimistically the company can scale its business to A$7bn p.a. compare to current $2+bn p.a.
In a nutshell, if investors pay attention to the product the company is offering, they should understand that Afterpay is not a factoring business, it has positioned itself to become the next Amazon, Tmall (Tmall introduced an online boxing day in China, and its single day sale revenue on Nov 11 2017, was close to A$5bn. Afterpay is already advertising for merchants and introducing sales events, which is so clear that they did not position themselves as a payment method, but climbed from the very end of the value chain, towards the top. The platform-like layout of their official website does show their ambition to become a mall, but not a financier. The fact that they do not charge interest on weekly instalment is because they can use such method to attract new users at acquisition cost as low as ~A$3/user (an increase of 1.5m user since 2017, against a marketing spent of 5.8m), amazon in its early stage spent over A$120 to acquire a single user.
This is where the company is heading towards to, the next Amazon, but filled with all well-known brands, instead of some small workshop in Asia. In e-commerce, user is everything, imagine one day, Afterpay has enough power to ask for credit limits from its merchants, transfer its credit risk to merchants and act as a powerful platform.
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