Zip Co Ltd (ASX:ZIP) share price has jumped 61.6% since the start of 2025. The Scentre Group (ZIP share price in focusThe(ASX:ZIP) share price has jumped 61.6% since the start of 2025. The ASX:SCG ) share price is tracking 26.0% off its 52-week lows.Zip Co is a ‘fintech’ company founded in 2013. It offers a buy-now-pay-later (BNPL) service that is popular among retail consumers.Zip’s platform allows customers to purchase items immediately and repay them over several interest-free instalments. Like most BNPL ...

Zip Co Ltd (ZIP) - Zip Co's share price has increased by 46.5% since the beginning of 2025, indicating strong market performance [1] - The company specializes in buy-now-pay-later (BNPL) services, providing flexible payment options for retail consumers [2] - Zip has partnered with over 79,300 retailers and serves more than 6 million customers globally [2] - Revenue has grown at a rate of 75.7% per year since 2021, reaching $868 million in FY24, while net profit improved from -$678 million to $6 million [6] - The return on equity (ROE) for Zip is reported at 1.8% [6] Scentre Group (SCG) - Scentre Group operates shopping centres under the Westfield brand in Australia and New Zealand, managing a portfolio valued at over $34 billion [3] - The group has an occupancy rate exceeding 99% and attracts more than half a billion visitors annually [3] - In CY23, Scentre Group reported a debt/equity ratio of 87.3%, indicating more equity than debt [7] - The average dividend yield since 2020 has been 4.8% per year, while the ROE for SCG in CY23 was reported at 1.0% [8]

Core Insights - The financial business of Mercado Libre, particularly its payment and credit segments, is crucial for the company's growth and market valuation [1][3] - The payment business serves as a traffic entry point rather than a primary revenue generator, while the credit business is expected to drive profitability [7][42] Financial Business Overview - Mercado Libre's financial business is categorized into three main segments: payment services, credit services, and digital wallet services [3][4] - Payment services include on-platform payments, off-platform payments, and Buy Now Pay Later (BNPL) options, with revenue generated primarily through transaction fees [5][6] - Credit services focus on loans to consumers and merchants, with significant revenue derived from interest on outstanding loan balances [4][50] - Digital wallet services provide users with various functionalities, enhancing customer engagement and data collection for credit services [44][46] Payment Business Dynamics - The payment business operates on a low-margin model, with net profit margins typically ranging from 20% to 40% of the total fee rate [11][12] - Payment fees are under pressure to decrease due to market maturity and competition, making it challenging to increase revenue through higher fees [14][18] - The growth of payment services is largely dependent on expanding the merchant base rather than increasing transaction fees [21][22] Credit Business Potential - The credit business has a high profit margin, with a net interest margin (NIMAL) exceeding 20%, indicating significant profitability potential in the Latin American market [50][73] - The total outstanding loans reached approximately $9.35 billion, reflecting a growth rate of over 90% year-on-year [56] - Credit card loans have become the primary growth driver within the credit segment, with a user base that has doubled in recent years [62][64] Market Position and Competition - Mercado Libre's market share in the credit sector remains low, with significant growth potential as it captures a larger portion of the market [64][65] - The competitive landscape in Brazil shows a shift towards fintech companies, with Mercado Pago's market share growing but still lagging behind competitors like PagSeguro and Stone [37][38] - The company's strategy focuses on leveraging its existing user base from e-commerce and payment services to drive growth in credit offerings [76][77]

You may have noticed a new option on the checkout page — zero-interest financing. More online retailers are offering to finance large purchases with no interest charges. It sounds too good to be true, but is it? Adrian found himself asking this question. He’s looking to buy around $10,000 worth of high-end camera gear, including a new body and lens, and the seller is offering 12-month financing at 0% interest. Adrian has been saving for this purchase and has the necessary cash, but is tempted to accept th ...

Group 1 - Klarna went public on the New York Stock Exchange with an opening price of $52, which is 30% higher than the IPO price, reaching an intraday high of $57.2 before closing at $45.82, reflecting a 14.55% increase [2] - Founded in 2005 and headquartered in Stockholm, Klarna is known for its "Buy Now, Pay Later" (BNPL) services and is transitioning from a single BNPL service provider to a comprehensive financial services provider [2] - The company has expanded its offerings to include savings accounts, checking accounts, and credit cards, and holds a full banking license in the EU [2] Group 2 - In the U.S. market, Klarna has partnered with Visa to launch a debit card and is the exclusive BNPL service provider for Walmart, also offering services on platforms like eBay [2] - For the six months ending June 30, Klarna reported revenues of $1.52 billion and a net loss of $153 million [2] - Klarna operates in 26 countries and has seen an increase of 26 million active users over the past 12 months [2]

Summary of Affirm's FY Conference Call - September 10, 2025 Company Overview - **Company**: Affirm (NasdaqGS:AFRM) - **Industry**: Buy Now Pay Later (BNPL) Key Highlights 1. **Fiscal Q2 2025 Performance**: - Affirm reported a **43% year-over-year growth in GMV** (Gross Merchandise Volume) driven by strong demand for **0% APR loans** [4][5] - Achieved **operating income profitability** for the first time on a GAAP basis, marking a significant milestone [5] - **RLTC** (Revenue Less Transaction Costs) increased by **37% year-over-year** [5] - Adjusted operating income margin reached **27%, up four percentage points year-over-year** [5] 2. **Affirm Card Growth**: - GMV from the Affirm Card more than **doubled year-over-year**, with a **132% increase** [6] - The number of cardholders grew by **93%**, achieving a **10% attach rate** [6] - The card segment now constitutes over **10% of total GMV** [6] 3. **Market Trends**: - The BNPL industry is experiencing significant growth, outpacing e-commerce growth [6] - BNPL is becoming mainstream, with consumers and merchants increasingly expecting BNPL options at checkout [6][7] 4. **Offline Market Opportunity**: - Currently, offline transactions account for less than **3% of total GMV**, while the offline market is **six times larger than online** [8] - Affirm sees substantial growth potential in capturing offline market share [8] 5. **FY26 Guidance**: - Affirm expects GMV growth of **36% to 37%** for the first fiscal quarter and a minimum of **25.5%** for FY26 [9][10] - The company anticipates continued GAAP profitability [10] 6. **Consumer Health and Delinquency Rates**: - Overall consumer health remains strong, with **30+ day delinquencies down** year-over-year [13][14] - Charge-off rates for monthly installment products are approximately **3.5%**, and for Pay in 4 loans, around **60 basis points** [14] 7. **Funding Environment**: - The funding environment is described as **constructive**, with strong demand for Affirm's loans [16][18] - Affirm maintains a diversified funding strategy, utilizing both on-balance sheet and off-balance sheet funding [21][23] 8. **International Expansion**: - Affirm has launched in the UK and is exploring further expansion into markets like Australia, Netherlands, France, and Germany [12][58] - The company plans to leverage existing partnerships, such as with Shopify, to facilitate international growth [60] 9. **Competitive Differentiation**: - Affirm emphasizes long-term partnerships with funding sources, differentiating itself from competitors who may focus on short-term transactions [61][62] - The company prides itself on superior underwriting capabilities and a comprehensive product offering [63][64] 10. **Adaptive Checkout**: - Affirm's Adaptive Checkout allows for customized offers for each transaction, enhancing consumer experience and improving conversion rates [45][48] Additional Insights - Affirm's strategy includes a focus on data accumulation to improve underwriting and offer personalization [48] - The company is committed to maintaining strong credit outcomes, which are essential for sustaining funding relationships [19][65] - Affirm's approach to funding is characterized by a focus on sustainable growth and efficient capital access [65][66]

Core Insights - Klarna Group Plc is pricing its IPO at $40 per share, implying a market capitalization of $15.1 billion, which is expected to yield significant returns for its major investor, Sequoia Capital [1][2] - Sequoia Capital's total investment in Klarna is approximately $500 million, and the value of its shares at the IPO pricing is around $3.2 billion, indicating a potential return of over six times the original investment [1][2] - Klarna's valuation has fluctuated dramatically, peaking at $45.6 billion in 2021 and dropping to about $6.7 billion in 2022 due to market volatility in the fintech sector [2] Company Overview - Klarna Group, founded in 2005 and headquartered in Stockholm, Sweden, specializes in "buy now, pay later" (BNPL) services, offering payment and installment solutions for both consumers and merchants [4] - The company provides various BNPL options, including "Pay in 4" and "Pay in 30 days," and integrates features like price comparison and cashback within its app, positioning itself as a comprehensive shopping and payment platform [4] - Klarna serves over a hundred thousand merchants and has accumulated around 111 million users globally, making it a significant player in the BNPL sector [4] Market Context - The IPO of Klarna is part of a broader resurgence in the global IPO market, particularly in the U.S., which is expected to see a busy week for listings [2] - Klarna is recognized for its innovative financing solutions and aims to expand into a global digital banking entity, offering digital debit cards and other financial products [2] - The competitive landscape includes players like Affirm Holdings Inc., whose stock has risen over 40% this year, highlighting the growing interest in BNPL services [2]

Financial Data and Key Metrics Changes - The company reported a 123% year-over-year increase in revenue, reaching $104.9 million [18] - Adjusted net income grew 286% year-over-year to $36.1 million, with a net income margin of 34.5% [18][23] - Gross margin for the quarter was 70.4%, reflecting strong unit economics [8][22] Business Line Data and Key Metrics Changes - Gross Merchandise Volume (GMV) rose 64% year-over-year, significantly outpacing the overall BNPL industry [8] - Monthly on-demand users and subscribers (referred to as mods) increased by 77% year-over-year to 658,000 [8][14] - The average quarterly purchase frequency increased from 4.5 to 6.1 times per quarter [15] Market Data and Key Metrics Changes - The company continues to represent less than 10% of the overall payments market, indicating significant growth potential [4] - The take rate increased to 13% at GMV, benefiting from strong subscriber engagement and the partnership with WebBank [19] Company Strategy and Development Direction - The company is focusing on expanding its product offerings, including new features like Pay in Five and auto couponing to enhance consumer experience [11][60] - There is a strategic push towards enterprise-level merchants and new categories such as grocery and bills, which have been slower to adopt BNPL [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model's strength amid market volatility, highlighting improved margins and rapid portfolio turnover [21] - The company raised its 2025 guidance, projecting revenue growth of 60% to 65% and earnings per share of $3.25, reflecting strong demand and credit performance [24][26] Other Important Information - A $50 million share repurchase program was announced, along with a six-for-one stock split to enhance liquidity [12] - The company has seen a significant increase in cash from operations, growing nearly $20 million year-over-year to $58.8 million [24] Q&A Session Summary Question: Can you tell us about your funnel of new merchants? - The company is focusing on enterprise-level merchants while also engaging with mid-sized merchants, expanding into new categories like grocery and bills [29][30] Question: What is the frequency or optimism you're seeing from on-demand products? - Monthly sequential growth indicates strong performance, with a lower barrier to entry for consumers [33] Question: Can you quantify the financial benefit from the WebBank partnership? - The partnership has improved revenue yield as a percentage of GMV, allowing for optimized product offerings [42] Question: What contributes to the stickiness of monthly subscribers? - The ease of use and seamless integration of the product into consumer shopping habits contribute to high retention rates [44][46] Question: How is the company managing credit quality? - The company maintains a focus on ROI and gross margins while being open to adjusting credit quality to support growth [50][52] Question: Can you describe the new features Pay in Five and auto couponing? - Pay in Five allows for an additional payment option, while auto couponing aims to enhance customer value and retention by providing unexpected savings [56][60]

Financial Data and Key Metrics Changes - In Q1 2025, consolidated revenue reached $684.1 million, a 6.6% increase year-over-year from $641.9 million [26] - Adjusted EBITDA was $70.3 million, slightly down from $72.6 million in the previous year [26] - Non-GAAP EPS was $0.90, exceeding the high end of the outlook [26] Business Line Data and Key Metrics Changes - Progressive Leasing's GMV was $402 million, down 4% year-over-year, primarily due to the bankruptcy of a large retail partner [22][23] - Excluding the impact of the Big Lots bankruptcy, GMV growth was low to mid-single digits [22][23] - Ford Technologies continued to grow revenues at a triple-digit rate, achieving its first quarter of positive adjusted EBITDA [11][81] Market Data and Key Metrics Changes - The lease portfolio balance as of December 31, 2024, was up 6.1% year-over-year, compared to a 5.2% decline at the same point in 2023 [10] - Write-offs for Q1 came in at 7.4%, slightly better than expected, with a targeted annual write-off range of 6% to 8% [10][24] Company Strategy and Development Direction - The company is focused on executing its ecosystem strategy, which includes both leasing and BNPL products to meet consumer needs [11][19] - Strategic investments will continue in marketing and technology to optimize decision-making and manage risk [12][19] - The company aims to maintain a disciplined approach to spending while prioritizing areas with the greatest impact [14][19] Management's Comments on Operating Environment and Future Outlook - The macro environment has deteriorated, with inflation and tariff concerns impacting consumer confidence and spending [12][28] - Despite challenges, the company remains confident in its ability to grow share and deliver sustainable profitable growth [13][30] - The revised revenue outlook for 2025 reflects the GMV headwinds, with expectations for revenue between $2.425 billion and $2.5 billion [29] Other Important Information - The company returned capital to shareholders through dividends and share repurchases, with a quarterly cash dividend of $0.13 per share [26] - The company has $335.2 million remaining under its $500 million share repurchase program [26] Q&A Session Summary Question: What are the dynamics of the trade-down environment? - Management noted that trade-down behavior still exists but is more muted compared to the latter half of 2024, with no significant tightening observed [36] Question: How has retail softness progressed? - The quarter started encouragingly, but a downshift in consumer sentiment was noted, with no significant rebound observed [40] Question: What is the impact of the Big Lots bankruptcy on GMV? - The $30 million GMV headwind from the lost customer is expected to be consistent across the quarters, with some seasonal variations [41][42] Question: How are inflation and tariffs affecting retail partners? - Management indicated that modest price increases could be beneficial, but significant price shocks and demand destruction are concerning [46] Question: What is the outlook for GMV in Q2 and the rest of the year? - No specific GMV guidance was provided due to uncertainty, but management remains focused on maintaining a healthy portfolio and managing expenses [95][96]