The acquisition is entirely in stock, so very little actual cash is changing hands.
According to the Afterpay investor relations site, Afterpay's gross revenue for FY21 (ended June 30, 2021), assuming constant currency exchanges rates, was $978 million AUD [0]. If you subtract out the first half of FY21's revenue ($385.2 million AUD) [1], we arrive at an implied revenue of $592.8 million AUD for the second half of FY21. Convert that to USD (USD$1 = AUD$1.36) and we arrive at an annualized revenue run rate of ~$871 million USD.
Which implies an acquisition price of ~33.3x gross revenue. Which is certainly a lot better than 76x ratio. Moreover, that growth rate is ~53.9% ($592.8 million / $385.2 million) over the prior half-year which is truly astounding growth.
The profit margin per "Revenue" dollar is so small for a payment processor it always seemed like a strange metric to value a payments company on for me, as they are essentially just a middle man for this "Revenue" taking it from the customer and giving it to the merchant. Afterpay does typically have higher merchant fees than a regular CC gateway tho
Afterpay aren't really a payments processor in the typical sense though, their business model is nothing short of genius tbh. They've set up a non-traditional 2-sided market connecting consumers + merchants, allow consumers to pay the MERCHANTS back over 4 installments and collect a 5% fee on the way through as well as any late fees (remember they're not taking on the risk here either)
This feels similar to the United States credit card market where there’s a 3% fee paid for by the merchant and thus a lot of opportunities to “reward” customers, and an incentive to keep things status quo.
According to the Afterpay investor relations site, Afterpay's gross revenue for FY21 (ended June 30, 2021), assuming constant currency exchanges rates, was $978 million AUD [0]. If you subtract out the first half of FY21's revenue ($385.2 million AUD) [1], we arrive at an implied revenue of $592.8 million AUD for the second half of FY21. Convert that to USD (USD$1 = AUD$1.36) and we arrive at an annualized revenue run rate of ~$871 million USD.
Which implies an acquisition price of ~33.3x gross revenue. Which is certainly a lot better than 76x ratio. Moreover, that growth rate is ~53.9% ($592.8 million / $385.2 million) over the prior half-year which is truly astounding growth.
[0]: On https://corporate.afterpay.com/investors/asx-announcements, go to 'ASX Announcements', then find the 'FY21 trading update' dated 2 Aug 2021, $978 million is on the second data column of the second table on the first page.
[1]: On https://corporate.afterpay.com/investors/asx-announcements, go to 'ASX Announcements', then find the 'H1 FY21 Results Announcement' dated 25 Feb 2021, $385.2 million is on the fourth data row of the first page's table.