The Splitit Ltd (ASX: SPT) share price is pushing higher on Thursday after the release of its second quarter update.
At the time of writing the buy now pay later provider's shares are up 8% to $1.48.
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How did Splitit perform in the second quarter?
As we saw with Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) during their latest quarters, Splitit's strong growth continued in the second quarter.
According to the release, Splitit delivered record quarterly merchant sales volume (MSV) of US$65.4 million. This was an increase of 260% on the prior corresponding period.
This led to the company recording gross revenue of US$2.4 million, which was a sizeable 460% increase on the same period last year. It is also more than the entire revenue it recorded in FY 2019.
What were the drivers of its growth?
They key drivers of growth during the quarter were its North America and Europe businesses. They reported MSV growth of 261% and 240%, respectively.
This was underpinned by an increase in new and large merchants during the quarter. Management notes that this reflects progress in its strategy to build its presence in key verticals such as homewares, luxury retail, jewellery, sporting & outdoors, and health.
Leading brands signing up to Splitit's solution included Purple, Daily Sale, Quiet Kat, Bedmart, Tatami Fightwear, Sofa Club and Alpina Watches. At the end of the period, its total merchants had surpassed 1,000, which is up 104% year on year.
Also supporting its growth was a jump in customer numbers. They increased 85% year on year to over 300,000 total shoppers.
Brad Paterson, CEO of Splitit, commented: "Accelerating merchant demand, strong foundations and a great shopper experience have set Splitit on a rapid growth trajectory, with record MSV and revenue during the quarter."
"We are seeing the benefits of tightening our product-market fit, attracting world-class talent, partnering with Stripe, Visa and Mastercard and supporting our scalable solution with the right merchant funding model. This is an exciting time and we are only just getting started. We expect this growth to continue as we focus on delivering significant benefit and value to our customers," he added.
Outlook.
Management notes that consumer awareness and preference for Splitit are growing.
And while it intends to watch macro conditions carefully, it remains optimistic about the growth ahead given the shift to ecommerce and its differentiated model which it feels is resonating strongly with both merchants and shoppers.
It concluded: "Splitit will continue to focus on large merchant acquisition in its target verticals to underpin further MSV and revenue growth. Partnerships will also play an important role in the coming quarters especially as new Stripe merchant onboarding functionality is deployed more broadly in Q3. The Company will continue to execute its new strategic partnerships with Mastercard and Visa."
