Shares in Zip Co Ltd (ASX:ZIP) have dropped more than 7% despite the company’s final year results revealing significant increases in both earnings and revenue, bolstered by strong performances in the United States which yielded record numbers.
Zip Co’s group cash EBTDA (earnings Before tax, depreciation and amortisation) for the 2024 fiscal year was $69.0 million: a rise of 243.2% from the previous year, while its revenue had risen 28.2% to $868.0 million.
Zip Americas was an underlying factor in this success, reporting record earnings of $77.2 million: increase of 420% compared to the 2023 fiscal year. Revenues were also higher – by 45.6% – coming in at another record figure of $450.6 million.
This performance was underpinned by continued support from existing customers in higher margin channels as well as optimisation across product and underwriting.
However, the Australia and New Zealand sector also delivered solid results, with EBITDA up 137.4% to $33 million, and revenue also increasing by 13.5% to $417.4 million, although the company acknowledged headwinds from increased interest costs and macro framework.
Group CEO and Managing Director Cynthia Scott said the 2024 fiscal year had been a strong one for Zip.
“The team successfully delivered four quarters of profitability, achieving Cash EBTDA of $69.0 million for the year, an improvement of $117.0 million on FY23,” she said.
“This result was driven by Zip’s particularly strong performance in the US with record cash EBTDA, TTV and revenue, and the ANZ business delivering a record cash EBTDA result of $33.0 million underpinned by continued margin expansion.
“During the year, Zip launched a new product in Australia, Zip Plus and piloted a new
‘Pay-in-8′ product in the US, reinforcing Zip’s commitment to innovating and creating great
products and experiences for customers and merchants.”
She added that Zip had taken various steps throughout the year to boost and simplify its balance sheet, had eliminated the company’s remaining note liabilities, repaid all corporate debt – through an institutional equity placement in July – and successfully refinanced $2.4 billion worth of funding.
At 12:47 AEST, shares in Zip were trading at $2.10, a fall of 7.49% since the market opened.