Can Zip’s US Momentum Outweigh the Control Concerns?
Written by
Varun Ratra
Zip Co (ASX: ZIP) faces a critical test as its US growth story collides with fresh concerns over fraud, customer growth and corporate control.
The buy now, pay later provider’s US business delivered strong growth in FY26. Revenue increased 44.3% to US$613.1 million, while total transaction volume rose 42.5% to US$8.6 billion. However, an external fraud incident has now disrupted first-quarter performance, adding uncertainty to the growth outlook.
US Growth Remains a Key Opportunity
The US remains Zip’s largest growth opportunity, supported by its expanding merchant network and customer engagement. Its US business also generated US$154.7 million in cash earnings before tax, depreciation and amortisation (EBTDA) in FY26, up 51.4% year on year.
However, strong historical results do not guarantee that momentum will continue. The latest fraud incident highlights the importance of risk controls, customer acquisition and credit quality as the business scales.
Why Control Concerns Matter
Corporate governance is another consideration for investors. Zip’s US-listed entity has a dual-class share structure that gives CEO Ian Siegel disproportionate voting power. As of 30 June 2026, he held approximately 79% of the combined voting power despite owning around 15.8% of the outstanding common stock.
This structure limits other shareholders’ influence over major corporate decisions. It does not, by itself, establish wrongdoing, but it is a factor investors may weigh when assessing accountability and governance.
What Should Investors Watch?
Three factors could shape Zip’s next phase:
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US customer growth: Whether the company can restore momentum following the fraud-related disruption.
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Credit performance: Whether bad-debt levels and transaction margins remain manageable as volumes grow.
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Governance and execution: Whether leadership changes and concentrated voting power affect investor confidence.
The Bottom Line
Zip’s US expansion offers meaningful growth potential, but the latest disruption makes execution and risk management especially important.
Investors will need to assess whether transaction growth translates into sustainable earnings while monitoring credit quality and governance concerns.
The balance between growth, risk controls and shareholder accountability will be central to the outlook for ZIP shares. This is an assessment of business factors, not a buy or sell recommendation.
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