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Splitit share price surges 24% higher after record second quarter growth

In morning trade the Splitit Ltd (ASX: SPT) share price has surged higher after the release of its second quarter update.

At the time of writing the buy now pay later provider’s shares are up 24% to $1.70.

How did Splitit perform in the second quarter?

Just as we have seen with Afterpay Ltd (ASX: APT) and Sezzle Inc (ASX: SZL) this week, demand for Splitit’s platform was exceptionally strong during the June quarter.

This led to the company reporting Merchant Sales Volume (MSV) of US$65.4 million for the second quarter. Which was a record 260% increase on the prior corresponding period and a 176% lift on its first quarter MSV.

This ultimately led to Splitit reporting gross revenue of US$2.4 million for the quarter, representing a whopping 460% increase on the prior corresponding period and 246% on the first quarter.

What were the drivers of its growth?

Strong growth was achieved in both North America and Europe, with MSV rising 261% and 240%, respectively, in these markets.

At the end of the period there were 1,000 merchants on its platform, which is more than double the number it had this time last year.

It was a similar story for its customer numbers, with total unique shoppers growing 85% over the 12 months to 309,000.

Another positive is that these customers are spending more. Splitit reported an average order value of US$893, up 44% on the prior corresponding period. However, it is worth noting that its repeat shopper metric is heading the wrong way. It has fallen to 10.2% from 13.6% in the first quarter.

Brad Paterson, CEO of Splitit commented: “June saw a continuation of the strong business momentum we experienced in April and May. Consumers are making better use of their existing credit to preserve cash, while demand from higher value merchants is ramping up, supported by the accelerated shift towards eCommerce as a result of COVID-19.”

“While we continue to tightly manage our expenses in light of global economic uncertainty, our business model supports more efficient consumer budgeting during these uncertain times, and continues to deliver enormous benefit to merchants by significantly improving consumer conversion on their sites,” he added.

Today’s gain means the Splitit share price is now up a staggering 750% from its March low of 20 cents.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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