Shares in BNPL (buy now pay later) company Zip Co (ASX: Z1P) have surged higher today after the Sydney-based group reported a 20 per cent lift in revenue for the third quarter.
Sentiment is also strong for the market darling with new partners like Chemist Warehouse, General Pants and Lorna Jane joining the platform, and the official launch of Zip in New Zealand during the quarter.
Z1P's share price is now worth almost 2.5 times what it was at the start of the year, and its 6 per cent rally this morning was accompanied by rises for its peers Afterpay (ASX: APT) at 4 per cent and Splitit (ASX: SPT) at 23 per cent.
"We are pleased to report another record quarter with revenue of $23.0m, and strong growth in receivables, in what is traditionally the weakest seasonal quarter in retail sales and transaction volumes," says Zip CEO Larry Diamond (pictured).
"Although transaction volume fell 8%, total transaction numbers were flat over the quarter as our focus on driving monthly active usage generated positive results.
"We continued to sign well-known enterprise clients to the platform Chemist Warehouse being the standout."
Diamond highlights the company successfully raised around $57 million in equity in the quarter to accelerate growth and capitalise on the large market opportunity in the BNPL and credit card sectors.
"We would like to thank all those who participated in the capital raise for their strong support that resulted in oversubscriptions in both the Share Placement and the Share Purchase Plan," he says.
At the end of the quarter, Zip had facilities available of $631.5 million, with its receivables book 16 per cent higher at $565.3 million. During the period Zip wrote off $2.7 million in net bad debts, compared to $2.3 million in the second quarter.
Meanwhile, the Zip native app launched in August continues to drive "enormous engagement value" with total downloads across iOS and Android tallying more than 740,000 monthly active users.
The app now ranks fifth in the finance category of Google Play with a customer rating of 4.8 on Android, and it is ranked tenth in the shopping category of Apple Store with a customer rating of 4.9.
The company's Pocketbook business also saw 10 per cent growth in customer numbers rising to 660,000.
Diamond has also commented on Zip's participation in the Senate inquiry into "credit and financial services targeted at Australians at risk of financial hardship" during, and is pleased its recommendations were in line with Zip's current practices.
"We also saw equity market conditions improve as the clouds of uncertainty over the sector were finally cleared."Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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