All eyes are on Afterpay Ltd (ASX: APT) shares on Wednesday following the release of the company's highly anticipated FY21 results.
Afterpay released some classic growth figures, including a 90% jump in underlying sales to $21.1 billion, a 62% uplift in active customers to 16.2 million, and a 77% increase in active merchants to 98,200.
From a financial perspective, the company's revenue increased 78% to $924.7 million, while its loss after tax widened to $159.4 million compared to a loss of $22.9 million in FY20.
With FY21 said and done, let's take a look at what might drive the Afterpay business in FY22.
Cross-border shopping
Cross-border shopping has become an emerging growth driver for the Afterpay business. This allows Afterpay customers access to Afterpay merchants internationally with accompanying foreign exchange conversions.
The company's FY21 results highlighted cross-border trade sales increasing ~120% during FY21 as more merchants and customers access the offering. That's in addition to a ~350% increase in merchant uptake on cross-border features against the prior corresponding period.
Cross-border trade delivers pleasing benefits to merchants, with Afterpay saying that cross-border shoppers transact ~24% more frequently than domestic-only and with up to a ~13% increase in sales.
It will be interesting to see how cross-border trade will influence its future growth, especially as the feature is now available across all operating regions.
Driving growth across North America
For the first time, North America exceeded Asia-Pacific as the company's largest region as measured by underlying sales.
The company said that expansion within North America, the world's largest retail region, continues at an impressive rate. That's despite growing off a larger base.
US developments include the launch of Afterpay's in-store card. This delivered an underlying sales run rate of ~$400 million based on July 2021 trading.
In addition, Afterpay launched its Canada operations in August 2020, with a current sales run rate of ~$211 million.
Successful launch in Europe
Afterpay successfully launched in Italy, Spain and France in March this year with a reported ~450 brands now live.
The company said that Germany is a "priority region for a retail-led expansion".
Something brewing in Asia?
Afterpay's commentary for its growth plans in Asia has largely remained the same for the past 12 months.
This includes establishing an in-region team in Singapore and "exploring opportunities to leverage Tencent Holdings' network and relationships".
The company's FY21 results reiterate its position in Asia, citing a "strategic foothold in Singapore".
What might be surprising was its point about an "expanding Shanghai office".
Afterpay share price snapshot
The Afterpay share price has displayed whipsaw-like action for most of 2021, up 13.5% year to date.
Investors might have to say goodbye to their Afterpay shares, with the Square (NYSE: SQ) takeover offer on track to be finalised in Q1 of calendar year 2022.
