The Openpay Group Ltd (ASX: OPY) share price is rocketing higher after the buy now, pay later (BNPL) provider reported significant increases in key metrics for the past quarter. Openpay shares were up by as much as 38% to 95 cents this morning after the company reported a 113% increase in active customers for Q3FY20.
Who is Openpay?
Openpay is a BNPL provider that debuted on the ASX in December. The company differentiates itself from Afterpay Ltd (ASX: APT) and other BNPL providers by offering higher payment limits and longer payment terms. It offers repayment plans of up to $20,000 that run for as long as 24 months. Openpay customers tend to be a little older than average for the sector, with higher transaction values.
Where Afterpay focuses on the retail sector, Openpay makes around half its revenue from the automotive, healthcare, and home improvement sectors. Customers are not charged interest but are charged fees for each repayment, account fees for large purchases, and late fees.
What did Openpay report?
This morning, Openpay reported over 600,000 active plans at the end of the March quarter, a 203% increase over the prior corresponding period. Active customer numbers grew by 113% to over 250,000. Increased repeat use of Openpay's offering was reported with 69% of new plans generated from repeat customers. 40% of active customers had more than 1 plan.
Merchant numbers grew by 63% to 2,025 at the end of Q3FY20. Merchant numbers in the automotive vertical increased by 86% and healthcare merchants increased by 66%. Openpay is typically the sole BNPL provider, or 1 of 2, in these verticals.
Strong momentum has been maintained across all key metrics despite the global economic slowdown caused by the coronavirus. Total transaction value grew to $45.8 million for the quarter, up 80% on the prior corresponding period. Revenue was up by 71% to $5.3 million.
The shift to online shopping is apparent with online business currently contributing 32% of total transaction value and 45% of plan originations. This compares to figures of 7% and 13% respectively in the same period last year.
Future plans
Openpay has expanded into the UK where it reports strong early-stage growth. Active customer numbers increased to 56,000 from 34,000 in December, and active plans increased to 92,000 from 44,000.
In Australia, the company has launched 'Openpay for Business' with Woolworths as its inaugural client. Integration is underway with revenues expected from H1FY21. Openpay has entered a major agreement with Pentana Solutions under which Openpay's solution will be deployed across 1,900 car dealers. Revenues are expected to flow from H1FY21.
