The Afterpay Touch Group Ltd (ASX: APT) share price is up after the leading buy now, pay later company gave an update for the four months to 31 October 2019 during its annual general meeting.
As you might expect from Afterpay, there was a lot of growth reported by the company.
Compared to the four months to October 2018, underlying sales grew by 110% to $2.7 billion, active customers increased by 137% to 6.1 million people and active merchants increased by 96% to 39,450.
Afterpay's current annualised run rate of underlying sales has now reached over $8.5 billion and it added 15,000 new customers per day in October 2019.
Pleasingly, Australian and Kiwi customers who joined Afterpay between FY15 to FY17 are now purchasing on average 22 times per year with improving loss rates the longer they have been a customer.
There are a number of new customers to get excited about for Afterpay including eBay Australia, Myer Holdings Ltd (ASX: MYR) and David Jones in Australia as well as Marks and Spencer in the UK.
The group gross loss, net transaction loss and net transaction margin all are in line with FY19 even though there are more underlying sales from the early stage loss markets of the US and UK. This is a promising sign.
In the ANZ region, in-store now represents 23% of total underlying sales, up from 18% in FY19, showing that it's not just a force in online commerce.
In the US market, Afterpay grew active customers by 51% since the start of FY20 to 2.6 million people and it achieved underlying merchant sales of $0.7 billion in the first four months.
In the UK it achieved $100 million of underlying sales in the four months of FY20.
The $200 million capital raising with US based tech investor Coatue Management may have been a surprise, it's raising that money at $28.50 per share, which was a 2.4% discount to the last closing price. Coatue will help Afterpay by developing retail data analytics and future data driven products.
Foolish takeaway
Afterpay has taken another step towards a good FY20 result, but the regulatory clouds still hang over the company with the RBA looking at the sector and AUSTRAC looking at the company's AML/CTF compliance. Afterpay is an exciting business, but I don't think I can add it to my portfolio at this price.
