Zip Co. Ltd. shares surged 14.73% to $2.96 on Wednesday after the buy-now-pay-later group reported record cash earnings and raised its U.S. growth forecast.
Group cash earnings before interest, tax, depreciation and amortisation rose 58% year-over-year to AUD 269 million in the fiscal year ended June 30, 2026, exceeding guidance. Statutory net profit after tax climbed 46% to AUD 116 million, while underlying net profit more than doubled. Total transaction volume increased 27% to AUD 16.7 billion across 112 million transactions and 6.5 million customers.
Operating margin expanded by 420 basis points to a record 20%, with cash gross profit up 26% to AUD 642 million and a gross profit margin of 89%. The group maintained 12 consecutive quarters of profitability and announced an on-market share buyback of up to AUD 50 million. Cash and liquidity stood at AUD 247 million, with operating cash inflows of AUD 257 million.
In the U.S., total transaction volume grew 42.5% to USD 8.6 billion, with revenue up over 44% to USD 613 million. Active U.S. customers rose 9% to 4.6 million, while transactions per customer increased 23% to 13.1 per year. In-store volume surged 67%, accounting for 27% of U.S. volume, with an average order value of USD 141. Credit losses remained within the 1.5% to 2.0% target range at 1.67% of TTV. Zip expects U.S. TTV to grow at least 30% in dollar terms in the fiscal year ending June 30, 2027.
Australia & New Zealand operations delivered cash earnings nearly doubling year-over-year, with operating margin expanding by more than 750 basis points. Transactions and spend per customer grew 17% and 15%, respectively, while the group added over 5,800 new merchants. The company announced an orderly wind-down of its New Zealand business to focus resources on Australia.
Group CEO Cynthia Scott said the results demonstrated Zip's earnings power and marked its 12th consecutive quarter of group profitability. U.S. CEO Joe Heck highlighted strong growth in TTV and revenue, noting continued expansion in merchant adoption and customer engagement.
Zip’s market capitalisation stands at AUD 409 million, trading at a P/E ratio of 15.1. The stock has gained 112% over the past six months and is up 60.8% from its 52-week low of $1.38, though still 40% below its 52-week high of $4.93.
