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17/04/23
18:12
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Originally posted by coppergaz:
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sorry for the long delay. heres my zip ANZ estimates, TTV $ 840m - $ 1,103m (down ~ 8% - 30% QoQ)*** Receivables $ 2,740m (up ~13% QoQ) Customers 2.4m (up ~ 4.4% QoQ) (ave debt ~ $1,150) Bad debts for 3rd Q ~$ 27m (up ~8% QoQ) Trailing 12 month bad debt $99.7m (up ~5% QoQ) Bad debts % of receivables ~ 4% (up from ~ 3.9%) Revenue ~ $ 92.5m - $112m ( up 0% - 26% (QoQ)*** ***TTV, I gave a range to this metric as usually Q3 TTV drops ~8% from Q2 with the exception of 2022 which saw a massive decline of almost 30%. If I was a holder it would be unacceptable to see sales fall 30% again. Unfortunately as zippay is a revolving line of credit model (not pay in 4 model) this sort of drop (when considering average amount of debt per active account) tell me zip balances are excessively high after the xmas period that the option of using zip isnt necessarily a choice or budgeting but partly exhaustion of available credit. (some will be quick to justify this by the tighting economic environment but this was not the case start of 2022 which saw the 30% fall, could it fall further when considering the current economic situation? lets see) ***Revenue I have also given a range to this metric as its heavily dependant on TTV/receivables. I have 2 factors which I believe will influence the amount of revenue. The 1st is TTV/receivables, should TTV fall by previous years ~8% for Q3 with the exception of 2022 (~30%) then we should see a significant rise in revenue due to the 2nd factor. Should TTV fall by 30% like 2022 revenue may be around the same amount as Q2 again fue to the 2nd factor. The second factor is the fact the monthly account keeping fee has increased (again). Although Ive mentioned that fees to the customers make up the majority of zips revenue before, to much fight back from holders, any holder should be happy about this exact point for the upcomming Q update. Fees had increased previously at the end of 2021 by ~33%. this is what I believe led to zips ability to announcing a increase in revenue for Q3 (2022) of 3% even though TTV fell off a cliff down ~30%. Monthly account fees have increased for this Q 25% From 30th Jan, (checky date as it would capture all fees at end of month at the new rate) This increase in fees and resulting amount of revenue is what I believe will be zips number one opportunity to avoid a CR for the near term. note USA fees charged on every single purchase has also increase (up to 50%) any holders who have argued these fees with me should be happy as the increase to these fees maybe zips saviour in the short term. this estimate on revenue is what led me to say (at $0.48) if I was ever going to invest in zip again it would be now. this revenue (even if TTV is weak) will be a headline for the upcomming report. Unfortunately it wont be due to what i expect to read, cost cutting, improved AI cr approvals and all the usual rhetoric. it is simply the increase in cost to the customers. Bad Debts This continues to increase every Q in Australia. even though the have changed the measurement of this metric in the report, the actual $ value of bad debts has increased. The bad % on the old measurement may go over 4%. this is a shocker! so far bad debts look to be heading over 100M for FY 2023 (a solid increase of 87m reported in July 2022)..... and as bad debts % are seasonal this will be set to worsen towards full financial year, I expect arrears to increase next 2 reports. I believe if zip got this below 2.5% (on the old measure) by July it would create the pump and squeeze holders have been looking for,,, unfortunately i dont see it happening but glth.) Customers I have estimated 2.4m basically as I just hope to see and increase in uptake in the BNPL and zip have not seen and increase at all since changing the definition of active customers in July 2022. I believe a decline is possible. A drop in active customers would be horrendous without some attribution from zip themselves removing accounts. Ave Debt With average debt per active customer now over $1000 is concerning when relating to potential bad debts, and exhaustion of credit availability (reducing future TTV) but positive in the fact receivables will be high resulting in more mothly fees being collected (at the new higher rate). This is a tight rope to get a balance where fees dont become a reason for customers to look for better/cheaper alternatives. (as an example the fees for zip USA are so high any purchases under $500 is better on a CC paying ~20% interest immediately assuming the same pay in 4 schedule, which is possibly partly to blame for the recent decline in active customer numbers in the USA imo) anyhow, should be an interesting 6 months. By years end I think we will have a clear picture of zips future. In the bin or profitable/sustainable. (one big question is if it does become profitable will it ever be enough profit? will they need to increase fees further?) all in my own opinion and not financial advice. my estimates are mine only and no claim to accuracy when actual figures are released.
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Excellent post, long time I haven't seen such detail, I much appreciate learning off your figures and explanations as well, i know it can be time consuming to write up but this can be applied elsewhere too. Thank you