By Nikhil Nainan
(Reuters) – Australia’s Afterpay Ltd said on Wednesday underlying sales in the first-quarter more than doubled, helped by strong growth in the United States where the buy-now-pay-later firm added nearly 1 million new customers over three months.
Afterpay’s U.S. business showed the second-fastest growth rate among all its regions in the quarter, with underlying sales there more than tripling to A$1.6 billion ($1.14 billion) from a year earlier.
The results highlight the United States as the sector’s biggest prize but Afterpay faces intense competition there from the likes of Sweden’s Klarna and more established financial firms such as PayPal Holdings.
Arguably Australia’s hottest stock this year, Afterpay now has 11.2 million active customers as of the end of September, 1.3 million more than three months ago.
Afterpay shares climbed 8.2% to A$103.8 by midday, while the broader market dipped.
The COVID-19 pandemic has accelerated the shift to online shopping and deepened the appeal of alternative credit firms, which offer small interest-free instalment loans to shoppers.
While some analysts said the U.S. numbers were a slight miss, Citigroup and UBS said Afterpay’s underlying sales were tracking ahead of their first-half forecast as the December quarter tended to favour greater spending.
Afterpay said that so far in October it was averaging about 15,000 new customers a day, compared with 12,500 a day over the quarter.
Total underlying sales for the three months ended Sept. 30 came in at A$4.1 billion, compared with A$1.9 billion in the previous corresponding period.
The company added that its global expansion plans in parts of mainland Europe and Asia were progressing well.
Afterpay laid out plans last week to diversify its product options in Australia by offering savings accounts through Westpac Banking Corp alongside budgeting tools and other services that analysts believe could be adopted globally.
(Reporting by Anushka Trivedi and Nikhil Kurian Nainan in Bengaluru; Editing by Maju Samuel and Stephen Coates)
