By Colin Kruger
Splitit shares plunged after the credit card-based buy now, pay later provider reported that revenue and active customer numbers actually fell quarter-on-quarter.
Splitit chief executive Brad Paterson is concentrating the company's efforts on high value customers and merchants.
The stock, which rocketed 800 per cent in the six weeks following its ASX debut in late January last year, dropped as much as 18 per cent to 56 cents on Friday morning after the release of its quarterly report to the ASX.
The company highlighted the record merchant sales volume (MSV) generated on its platform, but the company’s revenue fell seven per cent to $US433,000 ($645,000).
Its active shoppers on the platform fell six per cent to 118,000 for the quarter ending December 31.
The company said it "accelerated its ongoing efforts to rationalise its merchant base during the quarter to focus on high-value merchants" and high value customers.
The company, which is now led by Brad Paterson, said it expects that merchant sales volume and revenue "are expected to accelerate" this financial year, particularly in the second half ending December 31.
Splitit has a distinct model from other buy now, pay later providers like Afterpay.
Splitit uses the unused credit on a customers' card to effectively secure the full value of the purchase up front, but the customer is only debited the monthly instalments. The retailer, or a third party credit provider funds the instalment payments while Splitit collects a 2 per cent fee and none of the risk.
It means Splitit's business is far more scalable than other service providers like Afterpay, which must fund the sales made by its merchants and wear the risk of the customer not paying.
Splitit said it recorded strong growth in the US market with MSV up 35 per cent compared to the previous December quarter.
Splitit also announced the appointment of a new country manager for the UK and Europe. Former Prospa executive Melanie Vala will replace company founder Gil Don, who stepped down as Splitit's CEO in September last year.
Splitit shares closed 10 per cent lower at 61.5c on Friday.