Why is the Openpay (ASX: OPY) share price up 7% today?

Openpay is surging against the tide today

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Key points

  • The Openpay share price is almost 7% higher today
  • The company’s Q2 FY22 results showed record transaction value and soaring revenue
  • In earlier trade, the company’s share price jumped 9%

The Openpay Group Ltd (ASX: OPY) share price is in the green today amid a well-received quarterly update.

At the time of writing, the company’s shares are trading at 64 cents, a 6.67% gain. In late morning trade, after the release of the results, the Openpay share price hit 65.5 cents, a 9% jump on yesterday’s market close.

For perspective, the All Technology Index (ASX: XTX) is down 2.63%. Fellow buy now, pay later company Zip Co Ltd (ASX: Z1P)’s shares are also down 0.61%, while the Block Inc CDI (ASX: SQ2) share price is 4.43% lower.

Let’s take a look at what the BNPL company revealed today.

Openpay share price surges amid quarterly results

Total Group Q2 FY22 results

  • Record high total transaction value (TTV) of $118 million, 22% more than the previous corresponding period (PCP) of Q2 FY21.
  • Total quarterly revenue of $8 million, soaring 30% on comparable basis to PCP
  • Global net transaction margin improved 8% on PCP
  • Net bad debts fell from 2.3% to 1.9%
  • Active customers grew 33% on PCP to 614,000
  • Active merchants exploded 60% on PCP to 4,400
  • Active plans grew to 2.5 million, rising 71% on PCP

Australia and New Zealand

  • $87 million TTV, up 41% on PCP
  • Total quarterly revenue of $6.3 million, rising 37% on comparable basis to PCP
  • Net transaction margin gained 2.4% on PCP
  • Net bad debts dropped to 1.2%
  • Active customers gained 23% on PCP to more than 300,000
  • Active merchants grew 57% on PCP to 4,200
  • Active plans gained 61% on PCP up to more than 1.5 million

What else happened in the quarter?

In Australia, Openpay said its targeted approach and improved productivity supported its ambition to make a profit in the next 12 to 18 months.

Openpay launched its US-branded OpyPay product in the United States in the second quarter of FY22. Since the launch, the company has signed dental, veterinary, and automotive merchants in eight US states.

Also in the quarter, the company launched a US$271 million debt facility from Goldman Sachs and Atalaya. Opy also partnered with American Express, Worldpay from FIS, and Experian.

In the UK, the company formed a strategic partnership and revenue sharing agreement with Payment Assist.

What did management say?

Commenting on the results, non-executive chairman Patrick Tuttle said:

In Q2 FY22, Openpay delivered record TTV and very strong operating and financial results in a competitive market whilst keeping costs down and implementing additional efficiency measures to continue this trend.

In ANZ, we delivered record operating performance as we manage the business to profitability, and in the US, Opy now has all the building blocks in place to monetise this significant opportunity.

What’s next?

Openpay plans to prioritise growth in the US with its key partners in North America. The company says it has also secured a confidential agreement with a large US healthcare insurance provider to begin in the next quarter.

In the UK, the company has “made a strategic decision to change direction’ and will update the market “as appropriate”.

The company also plans to expedite its road to profit in Australia. As Motley Fool Australia reported earlier this month, Openpay has also announced some recent leadership changes.

Openpay share price snapshot

The Openpay share price has fallen 77% in the past 12 months, 15% in the past month alone. In the past week, it has shed almost 6%.

For perspective, the S&P/ASX 200 Index (ASX: XJO) Index has returned nearly 2% in the last 12 months.

Openpay has a market capitalisation of $83 million based on its current share price.

Should you invest $1,000 in Openpay right now?

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended ZIPCOLTD FPO. 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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