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Highlights
- Zip Co reports a 233.7% increase in Group Cash EBTDA to AU$31.7 million for the quarter ending 30 September 2024.
- Strong performance in the US, with TTV up 42.8% and revenue increasing 43.9% year-on-year.
- Zip's share price surged by over 12% on 29 October 2024, following the release of its quarterly results.
Zip Co Limited (ASX:ZIP), a leading digital financial services provider, has reported impressive financial results for the quarter ending 30 September 2024, driven primarily by significant growth in its US operations. The company posted a Group Cash EBTDA of AU$31.7 million, reflecting a remarkable 233.7% increase compared to the same period last year. This performance was supported by a year-on-year revenue increase of 18.8% to AU$239.9 million, and a 22.8% rise in total transaction volume (TTV) to AU$2.8 billion.
The standout performer for Zip this quarter was its US division, where TTV reached USAU$1.3 billion, up 42.8% from the previous year. This surge in growth is attributed to Zip’s strategic focus on its app, which has enhanced customer engagement in higher-margin channels. Revenue from the US rose to USAU$92.1 million, representing a 43.9% year-on-year increase. The success in the US market has reinforced Zip’s strategy to scale its business and drive strong customer demand.
Cynthia Scott, Group CEO and Managing Director of Zip, expressed her optimism about the company’s trajectory, saying: “Zip has continued to drive scale and deliver significant operating leverage in FY25... Our US business continued to show outstanding growth, with TTV up 42.8% and revenue up 43.9% versus 1Q24, underscoring strong customer demand and engagement in this market.”
In Australia and New Zealand, Zip’s financials remained steady, with revenue at AU$102.5 million. The company also reported an improved portfolio yield of 19.2%, reflecting its enhanced credit management efforts. Notably, the excess spread reached 6.9% in September 2024, despite the ongoing challenges posed by high interest rates in the region.
Zip’s cash position significantly improved over the quarter, bolstered by a AU$217 million institutional equity placement and an additional AU$50 million raised through a Share Purchase Plan (SPP). As of 30 September 2024, the company’s cash balance stood at AU$341.5 million, positioning it well for future growth initiatives.
Following the release of these strong financial results, Zip’s share price surged by more than 12% on 29 October 2024, reflecting investor confidence in the company’s growth prospects, particularly in the US market.
The positive momentum in Zip’s business has been attributed to its focus on scaling operations and driving customer engagement, particularly in higher-margin markets such as the US.
