Zip is cashflow positive without the cashback which had already been booked in the last qtr, revenue is shooting to the moon and cost will not grow the way it grew in the last two quarters because UK only 25 employees and already many big merchants, Canada will just have 5-10 employees for the soft launch. UK revenue for the first time when it was cost only for all these months. NZ already more than 500 k customers with nearly 2000 merchants....Engineering cost which comprises a major chunk of employees cost has started going down by opening up a delivery centre in India.
Did you know that a guy I knew was just one year experience and earning $70 k but Telstra offered $120 k and took him. Another friend of mine working with a Japanese company in Sydney told me just last week that any decent IT candidates with four five years experience would cost $140-$150 k...cost have shot through the roof and the only way to reduce it is to outsource all operations except customer service to low cost countries overseas.
This all happened because a lot of work permit visa holders in the IT sector can’t come from India because of the lockdown.
Revenue may again grow by 100 percent in the next four months like last once Zip Biz and Longer term BNPL products are rolled out....I do not see a CR very soon unless we go on a spending spree which we would have known by now.
Afterpay has a leaky bucket 89 percent revenue growth when limit was increased from $1.5 k to $3 k during the period. Zip will return to profitability earlier than Apt now so we do not need the billions in cash.
Again with longer tenor non funded products for the merchants many customers tend to settle the amount because they want to free the limits and this fund will be accumulated in prepaid in the liabilities side which will become a new source of finance (reducing interest costs) as we are not going to pay the merchant until due.
Zip will blow up all expectations...beware
Z1P Price at posting:
$9.56 Sentiment: Buy Disclosure: Held
(20min delay)