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Highlights
- Zip Co lifts FY25 cash earnings guidance
- Customer growth and transaction volumes fuel momentum
- Shares jump nearly 20% on strong market reaction
Zip Co (ASX:ZIP) saw its shares jump by nearly 20% on Wednesday after the digital payments platform raised its full-year 2025 earnings forecast, reflecting robust business performance across key markets. The company’s revised guidance now points to cash earnings of $153 million, up from its previous outlook of $147 million.
This revised forecast comes on the back of a remarkable year-on-year surge in cash earnings, which soared by 219.4% to reach $46 million. The lift was driven by rising transaction volumes and expanding customer numbers, particularly in the United States and Australia.
Total transaction volume and customer base have been growing steadily for Zip Co, leading to a 25% increase in group revenue, which climbed to $276 million. The momentum reflects continued consumer demand for flexible digital payment options and Zip Co’s strengthening footprint in international markets.
The latest earnings guidance upgrade is being seen as a positive signal for investors. While the revised $153 million target is a substantial improvement, some market analysts believe it still leans on the conservative side, given the current growth trajectory. However, caution remains over potential headwinds, particularly in the final quarter of the financial year. This follows developments related to tariff news in the United States, which may influence consumer behavior and broader economic conditions.
Despite these uncertainties, Zip Co’s financial performance highlights the company’s progress in scaling operations and improving unit economics. Increased operational efficiencies and customer engagement have helped to solidify its position among digital payment providers, both in domestic and global markets.
As of early Wednesday afternoon, shares in Zip Co were trading 19.9% higher, reflecting strong investor enthusiasm following the announcement.
The performance of Zip Co underscores a broader trend in the fintech sector, where digital-first platforms continue to benefit from shifts in consumer preferences and ongoing digital transformation. With earnings sharply higher and forecasts improving, the company is maintaining solid momentum heading into the remainder of FY25.
