APT Afterpay Limited

(Adds details)

By Stuart Condie

SYDNEY--Afterpay Ltd. is exploring a U.S. stock market listing after the buy-now-pay-later provider's North American operations became the largest contributor to underlying sales in its most recent fiscal quarter.

The company on Tuesday said it would remain headquartered in Australia, but believes a U.S. listing would accommodate growing global investor interest. It said it hadn't set a timeline for a decision, which would be subject to market conditions and customary listing prerequisites.

Afterpay's underlying sales -- the value of transactions made on its platform -- surged to 5.2 billion Australian dollars ($4.0 billion) for the three months through March, compared with A$2.6 billion a year earlier. North America contributed A$2.6 billion, compared with A$2.1 billion from its longer-established Australia and New Zealand operations.

North America was already Afterpay's largest market in terms of customer numbers and user growth in the region continued to set the pace in the third quarter of fiscal 2021.

Total customers across the group rose by 75% on-year to 14.6 million at March 31. Customer numbers in the U.S. and Canada grew by 112% to 9.3 million, but by just 9% to 3.5 million in the smaller and more mature Australia and New Zealand markets.

North America still lags in terms of merchant numbers, with 23,200 compared to 57,700 in Australia and New Zealand.

Founded in 2014, Afterpay launched in the U.S. in 2018. Up against the likes of Affirm Holdings Inc., Klarna Holding AB, and local rival Zip Co., Afterpay expanded its investor base through a series of capital raisings to fund growth, most recently raising A$1.5 billion in March via a convertible notes offering jointly led by Citi, Goldman Sachs and J.P. Morgan.

Afterpay said 3Q in-store volumes in Australia and New Zealand -- where pandemic restrictions have eased -- recovered to about 24% of the region's underlying sales, in line with pre-Covid levels. It said it expects this to increase further.

U.K. underlying sales rose 246% on-year to A$500 million despite the country's lockdown, while Afterpay said its partnership with Squarespace had also been well received. It expects its bank account product to launch in 1H of fiscal 2022.

Afterpay shares last traded at A$126.20, up 7.0% for 2021.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

April 19, 2021 19:36 ET (23:36 GMT)

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