Payright (ASX:PYR) share price surges 13% on trading update

It's a good day to be a shareholder in the buy now, pay later provider…

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The Payright Ltd (ASX: PYR) share price is taking off today after the company released a trading update for the first quarter of financial year 2022.

Within the update, the company announced its fifth consecutive quarter of growth, as well as an improvement to its credit quality. As a result, the market is sending the company's stock higher.

At the time of writing, the Payright share price is 39 cents, 13.62% higher than its previous close. It was as high as 45 cents — up 30% — in early trade before partially retreating.

Let's take a closer look at the first quarter of FY22 for the merchant-focused buy now, pay later (BNPL) provider.

The quarter just been for Payright

The Payright share price is surging higher after the company reported its gross merchandise value for the September quarter was 72% more than that of the prior comparable period (pcp). Payright's gross merchandise value reached $27.6 million for the 3 months just been.

Payright also saw its income from fees boom in the 3 months ended 30 September, coming to $3.8 million. That represents a 14% increase on that of the previous quarter and 45% more than the pcp.

Such strong performance came despite ongoing lockdowns in Australia and New Zealand.

The company also onboarded 5,800 new customers over the September quarter, bringing its total number of customers to 59,300. That's 58% more customers than it had at the end of financial year 2021's first quarter.

Finally, Payright's overall credit quality improved notably over the 3-month period. As of 30 September, the company had arrears of just 3.18%, down 18 basis points on that of the prior quarter.

Commentary from management

Co-CEO Piers Redward commented on the results boosting the Payright share price today, saying:

Our robust internal underwriting measures and collections practices have helped us navigate the balance between maintaining and protecting the quality of the loan book and accommodating COVID impacted customer hardship.

Fellow co-CEO Myles Redward added:

We are consistently attracting new customers in key target verticals with higher transaction values and the recent launch of our app has further increased usability and accessibility of our product, contributing to the 58% increase in total customer numbers…

With many states and territories now emerging from lockdown, we expect to see an uptick across our key metrics leading into November, December, and January.

Payright share price snapshot

Despite today's gain, the Payright share price is still deep in the red on the ASX.

It has fallen 59% since the start of 2021. It is also 61% lower than it was this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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