The Zip Co Ltd (ASX: ZIP) share price is in focus after the company reported a record first-quarter cash EBTDA of $62.8 million, up 98.1% year-on-year, and total transaction volume of $3.9 billion, up 38.7%.
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What did Zip Co report?
- Record group cash EBTDA of $62.8 million, up 98.1% vs 1Q25
- Total transaction volume (TTV) of $3.9 billion, up 38.7% vs 1Q25
- Total income of $321.5 million, up 32.8% year-on-year
- Revenue margin of 8.2% (versus 8.6% in 1Q25)
- Net bad debts steady at 1.6% of TTV
- Active customers increased to 6.4 million, up 5.3% year-on-year
- Operating margin improved to 19.5% from 13.1% a year earlier
What else do investors need to know?
Zip's US division delivered strong results, with US TTV and revenue increasing 47.2% and 51.2% respectively in local currency. Customer growth and engagement remain key drivers, especially ahead of the key holiday shopping season.
In Australia and New Zealand, TTV was up 11.1% year-on-year, with new features like Google Wallet integration helping engagement. The company also expanded its merchant network, notably partnering with Xero to offer more flexible payment solutions for small businesses.
Zip increased its on-market share buy-back from $50 million to $100 million, reflecting a strong balance sheet and ongoing positive cash flow. As at 30 September, Zip held $451.5 million in total cash with $212 million in available liquidity.
What did Zip Co management say?
Commenting on the result, Group CEO and Managing Director Cynthia Scott said:
Zip continues to deliver sustainable, profitable growth at scale, with record cash earnings of $62.8m up 98.1% year on year. This was underpinned by strong unit economics, material operating leverage and disciplined execution, driving a significant increase in operating margin to 19.5%. We are committed to delivering exceptional experiences for our customers, with engagement deepening across both markets… We remain focused on executing our strategic priorities of growth and engagement, product innovation and platforms for scale.
What's next for Zip Co?
Zip has upgraded its full-year outlook for US total transaction volume growth to above 40% in US dollars. The company reconfirmed its other full year targets announced in August.
Looking ahead, Zip continues to explore a potential dual listing on the Nasdaq, while maintaining its main listing on the ASX. The company says these moves remain subject to board and regulatory approvals.
Zip Co share price snapshot
Zip Co shares have risen 52% over the past year far outpacing the S&P/ASX 200 Index (ASX: XJO) which has increased around 8% over the same period.
