Zip (ZIP) H1 2025 earnings summary

Executive summary

• Achieved record financial performance in H1 FY25, with group cash EBTDA up 117% year-on-year to $67.0 million, driven by strong US expansion and disciplined execution, while ANZ returned to growth and launched new products.

• Total transaction volume reached $6.2 billion, up 23.9% year-on-year, with the US now contributing 70% of TTV and ANZ positioned for further acceleration.

• Cash gross profit increased 30.1% to $235.5 million, and operating margin improved by 584 basis points to 13%.

• Net bad debts as a percentage of TTV improved to 1.6%, the lowest in two years, reflecting strong credit performance.

• Repaid all corporate debt in July 2024, completed $1.1 billion refinancing in Australia, and upsized US funding facility to $300 million.

Financial highlights

• Total income grew 20% year-on-year to $514 million, supported by 41.1% revenue growth in the US and yield expansion in Australia.

• Cash gross profit rose 30.1% to $235.5 million, and group cash EBTDA increased 117% to $67 million.

• Statutory net profit after tax was $23 million, lower than prior year due to one-off gains in FY24.

• Cash, cash equivalents, and restricted cash increased to $527 million, with available cash and liquidity at $195.5 million at 31 December 2024.

• Operating margin increased by 584 basis points to 13%.

Outlook and guidance

• FY25 revenue margin will reflect a higher US portfolio weight and strong Australian yield, with US TTV growth expected to outpace market growth into January 2025.

• Cash OpEx for FY25 targeted at around 10% higher than FY24, with disciplined investment and a cash EBTDA margin goal of at least 1.1% of TTV.

• FY25 cash EBTDA expected to be at least $147 million, in line with H1 performance, subject to market conditions.

• Focus remains on sustainable growth and profitability in core markets, with continued investment in product innovation.

• No material post-balance date events or changes in state of affairs reported.