With the Afterpay Ltd (ASX: APT) share price down 14% year-to-date, investors might be looking over at reporting season as the next catalyst for some meaningful price action.
Afterpay has yet to confirm the date of its full year FY21 results announcement.
In the past four years, the company has delivered its results in the last week of August.
What might drive Afterpay shares during reporting season
European expansion
Afterpay went live in Southern Europe on 16 March with merchants in France, Spain and Italy.
The long awaited European launch witnessed the Afterpay share price tip 3.12% higher on the day of the announcement to $111.71.
The company previously cited that these three countries have a combined addressable e-commerce market that exceeds 150 billion euros.
It will be interesting to see the growth trajectory of these new regions and if they can begin to make any meaningful contributions to Afterpay's operating figures.
Afterpay's European regulatory licence also enables it to operate in Germany and Portugal.
An update for Asia
Afterpay established an in-region team in Asia back in August 2020 via the acquisition of a Singapore-based company operating in Indonesia.
In its FY20 results presentation, the company cited that it would be "exploring opportunities to leverage Tencent's network and relationships to expand into new regions in Asia".
The last time we heard about Asia was in the company's 1H21 results, where it was described as an "early-stage investment".
Income margins could pressure the Afterpay share price
The Afterpay share price was under heavy selling pressure the day PayPal revealed that it will not charge any late payment fees for its BNPL service.
In addition, PayPal would offer merchants a lower transaction fee.
The Australian Financial Review (AFR) reported that PayPal will launch its "Pay in 4" service in Australia "at a lower price for merchants than the average 3.9 per cent fee plus 30¢ charged by Afterpay. PayPal's fee will be 2.6 per cent of the cost of the goods plus 30¢."
By undercutting Afterpay's fees, analysts believe this could "put some pressure on Afterpay margins", according to the AFR.
UK growth
Afterpay's third quarter update highlighted the UK as its fastest growing region with a 246% increase in underlying sales to $0.5 billion and a 132% increase in active customers to 1.8 million.
In Q3 FY21, UK contributed to approximately 8.77% of the group's $5.7 billion in underlying sales, up from 3.85% a year ago.
