Zip Co (ASX:ZIP), the buy now, pay later provider, released third-quarter results that showed accelerating growth and stronger profitability, prompting the company to lift its full-year cash EBTDA outlook. The Sydney-listed group recorded a quarterly cash earnings before tax, depreciation and amortisation (EBTDA) of A$65.1 million, representing a 41.5% increase from the same period a year earlier.
Operating efficiency improved as margins widened to 19.4% from 16.5% in the prior comparable period, underlining the uplift in profitability alongside top-line expansion. The company reported total transaction value of A$4.0 billion, up 22.4% year-on-year, while total income rose 20.2% to A$335.2 million. Transaction volumes increased 20.3% to 27.4 million transactions, reflecting sustained customer engagement across the platform.
Geographic performance was uneven, with particularly strong momentum in the United States where transaction volumes climbed by more than 40% on a constant currency basis. The group noted that credit metrics remained under control: group net bad debts edged up slightly to 1.93% but stayed within the company’s stated target range.
On the back of these results, Zip upgraded its fiscal 2026 cash EBTDA guidance to at least A$260 million. Management attributed the guidance lift to continued growth, disciplined execution and resilient demand.
Market reaction to the quarterly report was pronounced. Shares of Zip listed in Sydney jumped as much as 24% to A$2.54 by 01:17 GMT.
Detailed results at a glance
- Quarterly cash EBTDA: A$65.1 million, up 41.5% year-on-year.
- Operating margin: 19.4% versus 16.5% a year earlier.
- Total transaction value: A$4.0 billion, up 22.4% year-on-year.
- Total income: A$335.2 million, up 20.2% year-on-year.
- Transaction volumes: 27.4 million, up 20.3% year-on-year.
- US transaction volumes: growth of more than 40% in constant currency terms.
- Group net bad debts: 1.93%, within company target range.
- Fiscal 2026 cash EBTDA guidance: upgraded to at least A$260 million.
The quarterly results portray a company that is expanding both its revenue base and its operational margin, while managing credit performance within defined targets. The significant uplift in US volumes was a notable contributor to overall growth during the quarter.
Zip’s upgraded guidance ties near-term expectations to continued growth, disciplined execution and resilient demand, the company said. The group also indicated an expectation that credit performance will improve further in the current quarter.
Investors reacted immediately to the improved earnings and outlook, sending the stock higher during Friday trading on the ASX.