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Highlights
- Shares of Zip Co Limited (ASX:ZIP) traded up by over 3%, mid-day on 27 January 2023.
- For Q2 FY23, ZIP reported record group quarterly revenue of AU$188 million (up 12% YoY).
- ZIP also claimed it is on track to deliver group positive cash EBTDA during H1 FY24.
Global financial services company Zip Co Limited (ASX:ZIP) recently announced its second quarter results for the three month period ending 31 December 2022 (Q2 FY23). Co-Founder, Global CEO and Managing Director, Larry Diamond says that the company has delivered “another strong quarter of record volumes despite the challenging external environment and adjustments to its risk settings”. ZIP also claimed to have made great progress on the strategy to deliver sustainable growth, right-size its global cost base and hasten the path to profitability.
Key highlights of Q2 FY23
- Record group quarterly revenue of AU$188 million (up 12% YoY).
- Record transaction volume of AU$2.7 billion (up 22% QoQ).
- Record transaction numbers of 22.6 million (up 15% QoQ).
- Cash transaction margin lifted to 2.6%.
- The revenue margin was 6.9%.
- Zip US delivered positive cash EBTDA in November and December; Zip ANZ delivered strong revenue growth of 17% YoY.
- Active customer numbers were 7.4 million.
- Merchants increased to 97.5k.
- The company retired AU$70 million of convertible notes in a highly accretive transaction.
- As of 31 December, ZIP had available cash and liquidity of AU$78.5 million.
Image source- Pixabay
Besides, the company went live with new enterprise merchants, Jetstar, Uber and eBay AU in Australia. In the US, ZIP launched with Barnes & Noble College across all campus stores. The company also renewed its Climate Neutral certification with the intent to measure and reduce emissions.
What’s next?
Larry Diamond has remarked that ZIP is well-positioned for any potential future regulatory changes. He added that the underlying business remains strong.
The quarterly report for Q2 FY23 also says that ZIP is on track to exit FY23 cash EBTDA positive on a sustainable basis. The company continues to focus on its strategic objectives of delivering sustainable growth in its core markets (ANZ and the US), unit economics and cost management.
Mid-day on 27 January 2023, ZIP quoted AU$0.68, up 3.4%. The market capitalisation stood at AU$505.14 million.
Amidst heightened inflation and cost of living pressure, it will be interesting to witness how ZIP performs and provides simple, fair and easy to use products.
