The Splitit Ltd (ASX: SPT) share price is suffering today amid the release of the company's half-year results for FY22.
Splitit shares are trading for 17.8 cents at the time of writing. Shortly after open on Wednesday, however, shares in the buy now, pay later provider fell 8% from the previous closing price of 18 cents.
Let's go over the report highlights.
What did Splitit report?
- Merchant sales volume $US194.8 million (AU$283.40 million), up 12.92% year over year (yoy)
- Net transaction margin up 1.3% from 0.3% in FY21
- Earnings before interest, taxes, depreciation, and amortisation (EBITDA) up 34.99% yoy to a loss of US$8.79 million (AU$12.79 million)
- Net loss after tax down 35% yoy to US$12.25 million (AU$17.82 million)
Some of the year's highlights included a new growth strategy for the company's instalments-as-a-service tech, with a greater emphasis on sourcing new partners.
Its partnership program reportedly built strong momentum in 2HFY22, with an enhanced partnership with BlueSnap and forming a new partnership with Everyware.
Nandan Sheth joined the company as the new Splitit CEO and managing director. While Dan Charron joined as a non-executive director.
What else happened in FY22?
The company also announced a placement of 64.4 million new shares at $0.175 per share, for a total of around AU$10.5 million. Splitit directors and c-level managers have agreed to subscribe a further AU$775,000.
The placement also allows investors to purchase stock options, with one free-attaching option offered for every two new shares purchased. Around 32.2 million options will be offered with an exercise price of AU 20 cents each and an expiry date of 30 months from the date of issue.
Funds will be used to drive the company's growth, expand its white-label instalments-as-a-service solution, and develop its buy now, pay later credit facility for merchants.
What did management say?
Splitit CEO and managing director Nandan Sheth said:
Splitit's rejuvenated growth strategy positions it to power the next generation of BNPL infrastructure for the existing payments ecosystem. Under this strategy, Splitit has already made good progress accelerating its pathway to profitability in the half year, including net transaction margin growth to 1.25% and a 22% reduction YoY in operating expenditure.
What's next?
The company said it is eyeing transaction margin and cost efficiencies to help it reach profitability. This will be helped by revising its $150 million receivables contract with Goldman Sachs, which is expected to save the company an additional US$5.3 million (AU$7.71 million) over two years.
Splitit will continue onboarding major global merchants and work with additional major payment providers.
The end goal of this strategy is to expand its white-label instalments-as-a-service offering across a broad and growing merchant base.
Splitit share price snapshot
The Splitit Payments share price is down 29% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 7.8% over the same period.
The company's market capitalisation is approximately $83.68 million.
