Zip Co Ltd has released its financial results for the six months ending December 31, 2024 (1H25), recording substantial growth across key financial and operational metrics.
Key highlights
- Cash EBTDA: A$67 million, up 117.1% from 1H24.
- Total Transaction Value (TTV): A$6.2 billion, increasing 23.9% year-on-year.
- Total income: A$514 million, up 19.8% from the prior corresponding period.
- Revenue margin: 8.2% (compared to 8.5% in 1H24), impacted by a higher US contribution, now accounting for 70% of TTV.
- Total transactions: 45.7 million, an 18.4% increase.
- Net bad debts: Approximately 1.6% of TTV, improving from 1.8% in 1H24.
- Cash gross profit: A$235.5 million, up 30.1%.
- Cash net transaction margin: 3.8%, up from 3.6% in 1H24.
- Active customers: 6.3 million, rising 1.5% year-on-year.
- Merchants on platform: 81,900, reflecting a 7.6% increase.
- The company’s financial performance was driven by strong transaction volume growth and improved profitability, with a notable contribution from its US operations.
US performance drives growth
Zip reported a strong performance in the United States, with total transaction volume (TTV) rising 40.3% to US$2.9 billion, driven by a record-breaking holiday trading period.
Active customers increased by 400,000 to 4.2 million, with engagement deepening as average customer spend and transactions rose 33.1% and 29.8%, respectively.
In-store shopping played a key role in growth, now contributing 22% of US TTV with a 64% year-on-year increase. The company also added major merchants in travel, entertainment and automotive, including GameStop, Major League Baseball Ticketing and Vivid Seats.
ANZ gains momentum
In Australia and New Zealand (ANZ), Zip returned to growth in the second quarter, with TTV up 0.4% year-on-year and a 10% increase in Australian TTV during December.
Portfolio yield in Australia rose to 18.6%, up 110 basis points, while excess spread improved by 70 basis points to 6.9%. The company secured new partnerships with high-value retailers, including Cathay Pacific and Lagardère Travel Retail.
Product innovation accelerates
Zip continued optimising its ‘Pay-in-8’ instalment solution in the US, which is now fully available through the Zip App. The company is developing its 'Pay-in-Z' platform for increased payment flexibility, set to launch in FY26.
In ANZ, Zip expanded the rollout of Zip Plus, with customers transacting 42% more often than Zip Pay users, leading to a 5.5% rise in total transactions.
Monthly Zip Plus acquisitions have more than doubled since launch. Additionally, the company introduced Zip Personal Loans in January 2025, offering new financing options to customers.
Strengthened balance sheet and cost efficiency
Zip repaid all corporate debt after raising $217 million through an underwritten equity placement in July 2024 and an additional $50.1 million through a share purchase plan in August. Cash reserves increased to $195.5 million as of December 31, 2024, up from $80.4 million at mid-year.
The company expanded its US funding facility by US$75 million to US$300 million in October, enhancing capital efficiency.
In Australia, $1.1 billion in receivables funding was refinanced, with US$97 million and A$278.8 million in undrawn headroom available for future growth.
Operating costs remained controlled, with total expenses at $168.6 million, equating to 2.7% of TTV, down from 3.0% in the prior year. Zip also maintained its carbon-neutral status for the fourth consecutive year.
Positioned for growth
Building on a strong start to the year, Zip is positioned for continued growth and operational leverage.
The company remains on track to achieve its FY25 targets within the two-year guidance outlined in August 2024.
Subject to market conditions, Zip expects to deliver a cash EBTDA of at least A$147 million for FY25.