Zip Co Ltd (ASX:ZIP, OTC:ZIZTF) shares jumped 7% to $4.71 after the BNPL group posted record quarterly cash earnings that cleared forecasts. Cash EBTDA of $62.8 million was up 98% year on year, outpacing E&P’s +94% expectation and the Visible Alpha consensus for +68%, with operating leverage lifting the margin to 19.5%. Growth was again led by the US, where revenue rose 55% to $213.1 million and helped drive group total income to $321.5 million on TTV of $3.9 billion. Active customers reached 6.4 million at quarter-end.
Quarter highlights
- Cash EBTDA: $62.8m, up 98% y/y; operating margin 19.5%.
- TTV: $3.9bn (+38.7%); total income $321.5m (+32.8%). US revenue $213.1m (+55.1% y/y); ANZ $105.4m(+2.9%). Transactions 26.0m.
- Active customers: 6.4m at quarter-end.
- Credit metrics: Group net bad debts 1.6% of TTV.
- Balance sheet & capital management: $451.5m total cash; $212.0m available cash & liquidity; on-market buy-back lifted to $100m.
- Outlook: US TTV growth now >40% (USD) for FY26; company continues to consider a Nasdaq dual listing(primary ASX listing retained).
Analysts characterised it as a clean beat heading into peak season. E&P’s Annabel Khun said the update landed ahead of consensus and underscored “strong momentum into the holiday season” across the key US and ANZ markets. RBC’s Jack Lynch called it a positive result for what is usually a seasonally tougher quarter, while noting US bad debts were elevated but within target. The US net bad debts/TTV ratio stepped up to about 1.5% in 1Q26 from roughly 1.1% in 4Q25, consistent with Zip’s charted trend, while the group remained at ~1.6%.
“Zip continues to deliver sustainable, profitable growth at scale, with record cash earnings of $62.8m up 98.1% year on year. This was underpinned by strong unit economics, material operating leverage and disciplined execution, driving a significant increase in operating margin to 19.5%, Zip Group CEO and Managing Director, Cynthia Scott said
“We are committed to delivering exceptional experiences for our customers, with engagement deepening across both markets. In the US, TTV and revenue increased (in USD) 47.2% and 51.2% respectively, with customer growth of 12.2% (+483k) year on year ahead of the holiday trading period. In ANZ, TTV increased 11.1% year on year driven by growth in Zip Plus, and pleasingly both revenue and AU receivables returned to year on year growth.
“We continued to optimise our funding portfolio with initiatives to improve capital efficiency, cost of funds, capacity and flexibility in both markets. We have also increased our on-market buy-back program from $50m to $100m of ordinary shares, consistent with our approach to maximise shareholder value.
“Following a strong start to the year, we have upgraded our expectation for US TTV growth to be above 40% (in USD) for the year and reconfirm the remainder of our target ranges as previously announced in August. We remain focused on executing our strategic priorities of growth and engagement, product innovation and platforms for scale.”
Capital and liquidity were also supportive: Zip finished the quarter with $451.5m in total cash and $212.0m in available cash and liquidity, and doubled its on-market buy-back to $100m, citing balance-sheet strength and operating cash flow. Management upgraded FY26 US TTV growth guidance to above 40% (USD) and reiterated that it is still evaluating a Nasdaq dual listing alongside the ASX listing. Together with disciplined (if seasonally higher) credit costs, those signals help explain today’s share-price pop.