The Afterpay Ltd (ASX: APT) share price is trading lower on Wednesday following the release of its full year results.
In afternoon trade, the buy now pay later (BNPL) provider's shares are down 1% to $133.78.
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What happened in FY 2021?
Afterpay was on form again in FY 2021 and delivered further strong growth in most key metrics.
For the 12 months ended 30 June, Afterpay's underlying sales grew 90% (or 102% in constant currency) year on year to $21.1 billion.
This was driven by a 146% increase in North American underlying sales to $9.8 billion, a 44% jump in ANZ underlying sales to $9.4 billion, and a 227% jump in Clearpay underlying sales to $1.8 billion.
Underpinning this growth was a 63% increase in active customers to 16.2 million. This reflects an 88% jump in North America to 10.5 million, a 104% increase in Clearpay customers to 2.1 million, and a more modest 8% lift in ANZ customers to 3.6 million.
Afterpay reported a net margin of $434.1 million, which was up 74% year on year. This was the result of its strong underlying sales growth, which was offset slightly by a reduction in its net margin ratio from 2.3% to 2.06%.
Finally, underlying EBITDA came in at $38.7 million, down 13% year on year.
How does this compare to expectations?
According to a note out of Ord Minnett, Afterpay fell short of its earnings expectations in FY 2021.
The broker was expecting underlying EBITDA of $75.4 million, which is almost double what the company actually achieved. This miss was due to higher than expected costs. However, because of the takeover approach from Square, it didn't expect the Afterpay share price to come under meaningful pressure for this miss.
Also missing expectations was its net margin of 2.06%. According to a note out of UBS, its analysts were expecting a margin of 2.25% for the year, whereas the market consensus stood at 2.12%. UBS notes that this was driven by its net transaction loss increasing from 38bps of underlying sales in FY 2020 to 63bps in FY 2021.
Finally, the team at Wilsons note that Afterpay's revenue was ahead of its expectations by approximately 2%.
However, although Afterpay beat its revenue expectations in FY 2021, the broker suspects that its forecasts for FY 2022 might be asking too much of the company. This is due to the broker's concerns that its US customer growth could be peaking after a flat finish to the year.
Overall, a bit of a mixed result in comparison to the market's expectations. Though, with Square acquiring the company, this hasn't had a great impact on the Afterpay share price today.
