Openpay share price explodes 33% on ‘record-breaking quarter’

Woman looks amazed and shocked as she looks at her laptop.Woman looks amazed and shocked as she looks at her laptop.

The Openpay Group Ltd (ASX: OPY) share price is on fire today after the company released its quarterly update for June.

The lending and payments fintech said it had “delivered another record-breaking quarter with market-leading margins and low bad debts”.

The Openpay share price opened Thursday’s session at 46 cents and quickly ascended to 52 cents. That’s 53% above its previous closing price. It is now trading at 45 cents, up 33%.

Openpay share price flies on record results

The highlights for the June quarter are as follows:

  • 1.8 million active plans, an increase of 50% on the previous corresponding period (pcp) of Q4 FY21
  • 321,000 active customers, an increase of 21% pcp
  • More than 4,100 active merchants vs. 3,700 in Q4 FY21
  • Record total value transaction (TTV) of $97.6 million, an increase of 54% pcp
  • Total quarterly revenue a record $8.5 million, up 80% pcp
  • 8.1% revenue margin, up from 7.3% pcp
  • 3.4% net transaction margin (NTM), up from 2% pcp
  • (1.1%) net transaction loss (NTL), up from (1.5%) pcp
  • 1.1% arrears, down from 1.9% pcp
  • 1.5% net bad debts, down from 2.3% pcp

What else happened in FY22?

Openpay said its OpyPro platform attracted a record-breaking 6,000 new accounts in the June quarter. That’s a 114% bump on the pcp. The platform’s total transaction value was $16.6 million, up 463% pcp.

In January 2022, Openpay sought to simplify its business by withdrawing from the UK market. More recently, it has announced its withdrawal from the US market. This means it will continue operating in these countries but will no longer proactively invest in its broader development there.

The company argues that this will enable it to accelerate its pathway to profitability in Australia.

Moving forward, Openpay said it will continue to look for commercialisation opportunities for its US and UK platforms “in a capital-light manner”.

What did management say?

Openpay CEO Dion Appel said:

This last quarter saw Openpay take some further tough but important decisions which has allowed the Company to focus on its core operating platform in Australia (across both B2C but also B2B via
OpyPro).

As these quarterly results highlight, the ability to focus our capital, people and strategy on Australia (which has always been our home market) versus multiple jurisdictions is delivering the outcomes we are seeing in the continued growth in TTV and revenue, the strength of our gross and net margins (arguably the strongest in our peer set), whilst at the same time continuing to deliver and improve our extremely low arrears and bad debts.

We will continue to optimise the business on an ongoing basis as well as look for opportunities to accelerate to profitability should they present themselves.

What’s next?

Openpay is hoping to deliver cash profitability in Australia by June 2023.

In its statement, Openpay said it “remains focused on delivering its targeted approach of larger lends over longer periods of time”.

It says this strategy has consistently resulted in market-leading margins and low net bad debts.

Openpay share price snapshot

The Openpay share price has fallen 42% in the year to date.

This is a larger fall than the S&P/ASX All Technology Index (ASX: XTX), which is down 29% year to date.

The post Openpay share price explodes 33% on ‘record-breaking quarter’ appeared first on The Motley Fool Australia.

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More reading

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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