Zip Co Ltd (ASX: ZIP) shares are leaping higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock closed yesterday trading for $2.20. In late morning trade on Thursday, shares are changing hands for $2.29 apiece, up 4.1%.
For some context, the ASX 200 is up 1.5% amid renewed Middle East peace hopes spurred by United States President Donald Trump.
Here's why Zip is racing ahead of the benchmark's gains today.
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Zip shares leap on Australian branding news
As you may know, on 13 May, Zip reported that the High Court of Australia ruled against it in a judgement involving privately owned, non-bank financial institution, Firstmac Limited.
Firstmac lodged the proceeding against Zip, noting that it had a trademark for the financial services term dating back to 2004.
Zip shares closed down 0.8% on the day, with the court ruling the company had to stop calling itself Zip in Australia. Although the ruling didn't affect the company's United States and New Zealand businesses, branding changes can lead to short-term costs and other headwinds for any stock.
Today, investors are bidding up Zip shares after the ASX 200 BNPL stock announced that it had reached an undisclosed settlement with Firstmac. This means Zip will still be called Zip in Australia.
Management noted that the settlement with Firstmac will not have any significant impact on its FY 2026 guidance.
According to the company:
While the terms of the settlement agreement are otherwise confidential, Zip has no further liability for damages or costs in relation to Firstmac's proceedings and Zip confirms that the amount payable under this settlement is not material to the Zip Group and does not affect Zip's FY26 guidance.
What's the latest from the ASX 200 BNPL stock?
Aside from its recent, and now resolved Australian branding issues, Zip shares last made headlines on 7 May after the company presented at the annual Macquarie Group Ltd (ASX: MQG) Conference.
Highlights included news of strong, ongoing growth in April.
In its key US growth market, the ASX 200 BNPL stock reported a year-on-year total transaction volume (TTV) increase in April of more than 40% (in US dollar terms).
Management also used the occasion to reaffirm Zip's full-year FY 2026 guidance.
The company expects to deliver full-year cash earnings before taxes, depreciation and amortisation (EBTDA) of $260 million. That will be driven by expectations of 40% or more TTV growth in the US (in US dollar terms).
Zip forecasts a full-year operating margin of 18% and a revenue margin of 8%.
