Zip (ASX:Z1P) share price on watch with 130% revenue growth in HY21

The Zip Co Ltd (ASX:Z1P) share price will be on watch today after it reported 130% growth of revenue for the first half of FY21.

| More on:
Zip share price man hitting digital screen saying buy now pay later

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Zip Co Ltd (ASX: Z1P) share price will be on watch today after revealing strong levels of growth in its FY21 half-year result.

What did Zip report?

Zip revealed that it generated record revenue of $160 million, which was growth of 130% year on year. At December 2020 it was generating annualised revenue of at least $480 million.

This revenue growth was made possible thanks to total transaction volume (TTV) growth of 141% year on year to $2.32 billion – this was annualising at $7.5 billion at December 2020.

Zip reported that it made positive cash earnings before tax, depreciation and amortisation (EBTDA) with cash gross profit margins increasing to 54%. The buy now, pay later company said that it is demonstrating market leading unit economics whilst investing for global growth.

The company said that the addition of Quadpay delivered a step change in unit economics, revenue yield and capital efficiency for the company. Revenue as a percentage of TTV was 6.89%, the gross profit margin as percentage of TTV was 3.71% and the blended book is now recycling every three months on average.

Zip said that it now has more than 5.7 million active customers, which was an increase of 217% year on year. It also has more than 38,500 merchants across the US, Australia, New Zealand and the UK.

The company said that its credit performance continues to deliver market leading results with net bad debts of 1.93% in Australia, demonstrating the strength of Zip's proprietary real-time credit decision technology.

New growth and partnerships

Zip said that it has secured key partnerships with Gamestop, Fanatics, Newegg and Sunglass Hut in the US. It has also partnered with Harvey Norman Holdings Limited (ASX: HVN), Domayne and Adore Beauty Group Ltd (ASX: ABY) in Australia.

The buy now, pay later business also said that it has launched in the UK in December 2020 with a number of brands including Boohoo, JD Sports, Fanatics and Cotton On with a strong global pipeline building.

Zip said it has now launched 'Tap & Zip' in Australia, becoming a Visa principal issuer. It has enabled a Chrome extension in the US, which enables users to pay later on any website.

It has established a new markets team to explore strategic and opportunistic expansion. During the half, a number of investments were made in the buy now, pay later space across Europe and the Middle East. Canada is currently in the pilot stage and scheduled for a soft launch in the second half of FY21 to support the US merchant base.

Zip business was formally launched after its beta period, with a refreshed brand, signing names like eBay and Facebook as partners. This allows small businesses to buy now, pay later for advertising and working capital.

Zip share price movements

The Zip share price has been shooting higher this year. Since the start of 2021, Zip shares have risen higher by 112%.


Zip said that it has global momentum and it has set the foundations to accelerate growth across the world over the rest of FY21. It's looking for new opportunities and strategic partnerships to expand the footprint.

It also said that it has a strong pipeline of global retail partnerships. Zip is going to keep focusing on healthy and sustainable unit economics.

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Contented looking man leans back in his chair at his desk and smiles.
Share Market News

5 things to watch on the ASX 200 on Monday

It looks set to be a good start to the week for Aussie investors.

Read more »

A couple sits on a sofa, each clutching their heads in horror and disbelief, while looking at a laptop screen.
Share Market News

These are the 10 most shorted ASX shares

Let's see which shares short sellers are targeting this week.

Read more »

A graphic image of the world globe surrounded by tech images is superimposed on the setting of an office where three businesspeople are speaking together while standing.
Share Market News

Here's how the ASX 200 market sectors stacked up last week

ASX technology shares led the market with a 2.8% gain this week.

Read more »

A young woman lifts her red glasses with one hand as she takes a closer look at news about interest rates rising and one expert's surprising recommendation as to which ASX shares to buy
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

Woman in a hammock relaxing, symbolising passive income.
Dividend Investing

Hoping to retire? I'd buy these ASX 200 dividend shares for passive income

I think these ASX 200 dividend stocks will continue to reward passive income investors for years to come.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Broker Notes

These ASX 300 shares could rise 35% to 65%

Analysts are tipping these shares to rise strongly from current levels. How high could they go?

Read more »

a man in a high visibility vest and hard hat holds a thumbs up at a mine site with heavy equipment in the background.
Broker Notes

What are brokers saying about BHP shares following the miner's quarterly results?

Analysts have crunched the numbers.

Read more »

A young girls clings in fright to a big red slide.
Share Market News

Here are the top 10 ASX 200 shares today

Investors were hitting the sell button hard today...

Read more »