Afterpay exploring potential US listing as sales triple in North America

Afterpay's (ASX: APT) explosive growth in the US market has emboldened its ambitions to list in the region, given it is now the largest contributor to the buy-now pay-later (BNPL) business.

The company says it is actively working with external advisors to explore options for a US listing, a region Afterpay expects will only continue to grow.

While APT will remain headquartered in Australia, the BNPL giant with a $38.48 billion market capitalisation wants to tap into investors with more of a global focus.

"A US listing would further accommodate this growing interest," Afterpay said.

"There is no timeline set for a board decision on a US listing and any listing would be subject to market conditions, approval by a US exchange and satisfying a number of other customary listing prerequisites."

The announcement comes concurrently with APT's Q3 FY21 business update, in which the company reported major growth in the Australian, US and UK markets.

Underlying sales more than tripled in both the US (up 211 per cent) and the UK (up 277 per cent).

March 2021 sales exceeded December 2020's and delivered the second highest monthly underlying sales ever recorded, with the US becoming the first region to record more than $1 billion in a single month.

Based on Q3 performance, North America is now the largest contributor to underlying sales and outperformed the seasonally strong Q2 FY21 on a local currency basis.

It comes as major merchants have signed up to Afterpay's BNPL platform in the US, including fashion retailers Urban Outfitters, Anthropologie, Free People, and lululemon.

Slower underlying sales growth of 48 per cent in the ANZ region dragged down the group's overall result in the third quarter, but the company still saw an overall increase of 104 per cent on the prior corresponding period.

Australian in-store sales are expected to further accelerate in the next quarter following the 28 March launch of the 'Afterpay Card'.

Once customers have set up this digital card in the Afterpay app, they can check out in-store at any Afterpay merchant simply by tapping on the payment terminal. APT says more than 650,000 AU customers have set up their Afterpay Card since its launch.

During the quarter, APT's European brand Clearpay was launched in Spain, France and Italy during the quarter. It is also on track to launch the brand in Germany during the first half of FY22.

Shares in APT are up 0.04 per cent to $126.25 per share at 12.38pm AEST.

Business News Australia