The Afterpay Touch Group Ltd (ASX: APT) share price fell more than 11% today after the buy now, pay later business reported its half-year result to 31 December 2018.
Despite the large share price fall today, it is still up more than 4.6% since the start of the week.
Afterpay reported that its underlying sales grew by 147% to $2.3 billion and total income increased by 91% to $116.1 million. This is pretty impressive growth for any business.
Its pro-forma earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 19% to $17 million, but with the new accounting standards EBITDA excluding 'significant items' declined by 20% to $11.5 million.
Afterpay's loss after tax declined by 3,043% to $22 million mostly due to share-based payments.
The operating losses are building due to Afterpay's ramp-up of global expansion whilst reducing gross losses and at the same time reducing late fees as a percentage of income. Afterpay is improving the quality of its Australian customer base with a high level of returning customers who continue to pay their instalments.
Afterpay said it has a plan to hit $20 billion of GMV by the end of FY22.
In the US, Afterpay said it is on track to have over 1 million active customers and 2,000 active merchants by the end of March 2019.
In the UK, the official launch is scheduled for the second half of FY19.
Foolish takeaway
The growth numbers Afterpay revealed were exciting, but it continues to report a loss. However, Afterpay did say that it has a strong balance sheet to support its expansion plans.
Trading at 134x FY20's estimated earnings I don't think Afterpay is an obvious buy right now.
