Zip Co Shares Soar 24% on Strong Q3 Earnings, Outlook

Zip Co Reports Record Earnings and Upgrades Forecast

Buy now, pay later firm Zip Co (ASX:ZIP) saw its shares surge significantly following the announcement of strong third-quarter earnings and an upgraded full-year outlook. The company reported record quarterly cash earnings before tax, depreciation and amortisation (EBTDA) of A$65.1 million, a 41.5% increase year-on-year, reflecting improved profitability and accelerating growth.

Key Financial Highlights

The company's total transaction value rose 22.4% to A$4.0 billion, while total income grew by 20.2% to A$335.2 million. Growth was particularly robust in the United States, where transaction volumes increased by over 40% in constant currency terms. Despite a slight rise in net bad debts to 1.93%, the figure remains within the company's target range.

Market Impact and Future Outlook

In response to the positive results, Sydney-listed Zip shares jumped as much as 24% to A$2.54. Citing sustained growth and resilient demand, Zip upgraded its fiscal 2026 cash EBTDA guidance to a minimum of A$260 million. This signals strong confidence in its continued performance and disciplined execution of its strategy.

Summary

Zip Co's strong quarterly performance, especially in the US market, has positively impacted its stock price and led to a more optimistic financial forecast for fiscal 2026. The market will be watching for continued margin expansion and credit performance in the coming quarters.

FAQ

Q: Why did Zip Co's shares increase sharply?
A: The shares rose due to record quarterly earnings, strong growth in transaction volume, and an upgraded full-year financial outlook.

Q: What was Zip's upgraded guidance?
A: Zip upgraded its fiscal 2026 cash EBTDA guidance to at least A$260 million.

Source: Investing.com