- Buy now, pay later business Zip Co (ZIP) posts a 27 per cent bump in revenue and a slight increase in quarterly transaction margins for the three months to the end of June
- The company says in its latest annual report a 20 per cent year-on-year increase in transaction volume helped drive quarterly revenue of $160.1 million
- Following the company’s scrapped merger deal with fellow ASX-listed Sezzle (SZL) earlier this month, Zip says it is on track to reach profitability earlier than expected
- While bad debts grew to 3.82 per cent over the June quarter, Zip says its growing customer count and transaction numbers are supporting an updated business plan to fast-track profitability
- Shares in Zip Co are up 3.01 per cent to 68 cents per share at 10:55 am AEST
ASX-listed fintech Zip Co (ZIP) has posted a 27 per cent bump in revenue and a slight increase in quarterly transaction margins for the three months to the end of June.
The company said in its latest annual report a 20 per cent year-on-year increase in transaction volume, to $2.2 billion, helped drive quarterly revenue of $160.1 million.
Year-on-year, June quarter transaction numbers grew 37 per cent to 19.4 million, with Zip’s customer count up 64 per cent to 12 million and merchants using its buy now, pay later (BNPL) platform up 77 per cent to 90,700.
On a quarter-by-quarter basis, Zip increased its cash transaction margin to 2.4 per cent from 2.3 per cent in the March quarter.
Zip chief Larry Diamond said the “solid” quarterly results came amid an updated business plan from the company to fast-track profitability.
“As we celebrate our ninth birthday, we reflect on the incredible growth, from start-up
pioneering the role of BNPL, to a publicly listed, global business with over 12 million customers,” Mr Diamond said.
“Our role as a financial services technology provider is becoming even more crucial in the
current climate as we support our customers and merchant partners through this
inflationary period.”
Earlier this month, Zip and fellow ASX-listed Sezzle (SZL) scrapped a $491 million merger deal in light of current macroeconomic and market conditions.
Mr Diamond said the company saw this decision to be in the best interests of shareholders, and it would help the company reach profitability faster.
“This, coupled with recent decisions made as well as ongoing strategic initiatives, will see the group reach cash earnings before tax, depreciation, and amortisation (EBTDA) profitability earlier than anticipated,” he said.
Zip had available cash and liquidity of around $279 million at the end of June, which it said would likely be sufficient to carry the company through to EBDTA profitability.
However, while the company said it was “well-placed” regarding its debt funding, Zip further grew its bad debts over the June quarter to 3.82 per cent compared to 3.4 per cent at the end of March.
Shares in Zip Co were up 4.51 per cent to 69.5 cents per share at 12:00 pm AEST.