One of the most eagerly awaited results during earnings season will be the Afterpay Touch Group Ltd (ASX: APT) full year report.
The fast-growing payments company is scheduled to release its results on Wednesday August 28.
What should you expect from Afterpay Touch?
According to a note out of Goldman Sachs, its analysts expect the company to report merchant sales of $5.05 billion in FY 2019. This comprises merchant sales of $4.1 billion in the ANZ market, $938.5 million in the United States, and just $3.7 million in the UK.
This is expected to lead to merchant revenue of $197.4 million, up 123% on FY 2018's result. And combined with late fee and Touchcorp revenues, the broker expects group revenues of $255.8 million in FY 2019, up ~80% year on year.
In respect to customer numbers, Goldman Sachs expects Afterpay Touch to have finished the period with 4,546,134 active global customer numbers. This will be over double FY 2018's and comprises 2.75 million in the ANZ market, 1.75 million in the United States, and 46,134 in the UK.
However, based on recent download data, Goldman estimates that the company reached ~2 million active customers in the US market at the end of July. Though it notes that its estimate is sensitive to the assumption on how many customers are downloading the app.
In Australia and New Zealand the broker thinks that its customer growth could be slowing slightly, with rival Zip Co Ltd (ASX: Z1P) narrowing the gap.
It said: "APT continues to see a steady trend in app downloads in the ANZ Market with July (113k app downloads) slightly below with the average of the six months preceding (117k). Its app continues to be more popular than Zip Co's but that gap is gradually narrowing."
Over in the UK the broker isn't expecting anything significant. Though, it notes that "Clearpay is trending up in terms of popularity of Google searches and it has now got 60 retailers listed on its website (Boohoo, ASOS and JD appear to be its most prominent retail partners although we note that with JD, Clearpay can only be used on certain products) while Klarna continues to steadily grow its user base."
Finally, other areas of focus for the broker include "(1) trends in unit economics of ANZ and USA, (2) operating cost base including capitalised development costs, (3) enterprise retailer pipeline in US and UK, (4) innovation pipeline and new opportunities."
I'm expecting a strong result from Afterpay Touch, but it may be prudent to sit tight and wait for the result to be released before picking up shares. Alternatively, if you are interested in buying shares today, you could consider buying half now and half after the release.
