Growth investing is about backing companies that prioritise expanding their business over paying dividends. Rather than distributing profits to shareholders, these companies typically reinvest earnings into technology, talent, and market expansion — with the aim of delivering outsized share price appreciation.
That makes them attractive to investors seeking capital growth instead of income. Of course, the trade-off is higher volatility and the need for strong conviction in both the company's fundamentals and market sentiment.
Here are three ASX growth shares that have been ticking the right boxes in 2025.
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Life360 Inc (ASX: 360)
Life360 develops the family safety app used by more than 66 million monthly active users worldwide. Its platform helps families stay connected through location sharing, driving safety features, and emergency alerts.
The company's most recent update showed revenue of US$115.4 million, up 36% year on year, while operating earnings (EBITDA) rose 85% to US$20.3 million. Investors responded quickly, pushing the share price more than 13% higher in the two days following the announcement.
At the time of writing, the Life360 share price has more than doubled year to date, buoyed by strong US adoption and the launch of new advertising products. Broker sentiment remains optimistic, with Bell Potter setting a price target of $47.50 and Morgan Stanley going even further with a $51 target.
The combination of rapid top-line growth, improving margins, and new monetisation streams makes Life360 one of the ASX's more compelling technology growth stories.
Codan Ltd (ASX: CDA)
Codan designs and manufactures metal detection and communications equipment. It has a strong footprint in recreational and defence markets. Its detectors are sold globally, benefiting from demand linked to the gold price and expanding into tactical communications.
The company's FY25 results were a standout. Revenue surged 22% to $674.2 million and net profit after tax lifted 27% to $103.5 million. That momentum was further supported by acquisitions, including US-based Kagwerks, which broadened Codan's defence offering.
Investors rewarded Codan shares with a 47% gain in August alone. The company's ability to consistently grow earnings, expand internationally, and diversify into higher-margin markets has strengthened sentiment around its long-term outlook.
For growth-focused investors, Codan's mix of organic expansion and strategic acquisitions highlights why it continues to shine on the ASX.
Zip Co Ltd (ASX: ZIP)
Zip is the buy now, pay later (BNPL) player that has staged one of the most dramatic rebounds on the market this year. After falling out of favour in prior years, Zip has benefited from streamlined operations and renewed investor confidence in its US and ANZ franchises.
In FY25, Zip's total transaction volume rose 30% to $13.1 billion, while cash operating earnings (EBITDA) soared 147% to $170.3 million. Margins improved sharply, and management upgraded FY26 guidance, forecasting more than 35% transaction growth and operating margins between 16% and 19%.
The market has taken notice. Zip shares are currently up more than 270% since April and rose 32% in August alone. While volatility remains a feature of BNPL stocks, analysts believe Zip has differentiated itself in the US and could be "materially bigger" in the years ahead.
Foolish Takeaway
Life360, Codan, and Zip are three very different businesses, but they share one trait: a focus on growth that has been rewarding for investors in 2025. While these companies may not appeal to income seekers, for those chasing capital appreciation, they show that opportunities exist on the ASX for both innovation-driven and turnaround stories.
