Customers definitely dropped a while back as they got very...

Customers definitely dropped a while back as they got very strict with the approval process, focused on lowering bad debts, changed the definition of active customers, shut down their operations outside of their core countries etc. But since they did this numbers have become relatively stable - and I guess we will see moving forward how they go. There have always been 2 types of strategies: sustainable profitability or growth first and profitability later. Zip pivoted due to the macroeconomic environment and decided to focus on profitability first, and growth later. Affirm didn't pivot as far as I'm aware - they had a lot more cash available when the macroeconomic environment suffered and as a result they continued to chase growth at the expense of profitability. Both strategies have merit in my opinion - but now that Zip has achieved what it wanted regarding positive cash EBTDA etc, it has said it will begin focusing on growth a bit more. I suspect we will start seeing a rise in customer numbers over the next 6 months as they do this, particularly as they have also started advertising/marketing more.

From my perspective Q1, Q3 and Q4 are largely the same from a seasonal perspective - with Q2 getting a big boost due to the holidays. But I guess we'll have to wait and see how things go over the next 6 months to see what the trend in Australia's TTV etc is. I was personally surprised that TTV in Australia had risen in the most recent quarter as I was worried the TTV would keep falling as per recent quarters, but I'm optimistic that they have resolved this - I'll be keeping a close eye on it over the next few quarters regardless.

I think the beauty of BNPL and other financial services is that it is true they can benefit both from interest rates going up (i.e. more customers need to use their services due to hardship) and from interest rates going down (i.e. those same customers might feel loyal to that company for helping them through the hard times, keep using the product out of habit etc). BNPL usage was on the rise well before interest rates were hiked, and if anything the only reason Zip's numbers didn't skyrocket during the last couple years is because they actively chose to tighten up - they could have been a lot looser with applications and had their customer numbers skyrocket if they had more money like Affirm did. Anyway I'll be keeping a close eye on customer numbers over the next few quarters too, but I'm less worried about customer numbers in the short term and more focused on the revenue continuing to increase as my main focus and priority.

Either way, should be interesting!