Stock Update: ZIP Stock Falls Today Despite Strong Earnings and Bullish Outlook

ZIP has delivered strong operational and financial results, supported by demand and earnings growth and a positive outlook.

ZIP Co Ltd (ASX: ZIP)

Has announced on 20 August 2026 its FY26 results for the period ending in June 2026. ZIP has delivered strong results led by solid operational and financial performance.

ZIP reported group total transaction volume (TTV) of A$16.7B, an increase of 27.2% YoY. The US TTV grew by 42.5% YoY to US$8.6B, and New Zealand TTV reported a modest growth of 6.2% YoY to A$4B. ZIP active customers rose by 3.7% YoY to 6.5 million, transactions increased by 20.5% to 112.1 million, and the merchant network is up to 97.4k, an increase of 13.8% YoY.

Total income increased by 24.6% YoY to A$1.35B, with a revenue margin of 8.1% of TTV, led by strong US performance with a 44.3% YoY increase in revenue to US$613.1M and a contribution of 76% in TTV. This top-line performance highlights customer engagement and disciplined execution.

ZIP has delivered strong profitability performance driven by strong unit economics and operational leverage. Overall cash gross profit increased by 26.2% to A$642.3M, and cash EBTDA increased massively by 57.9% YoY to A$268.9M, with an operating margin of 20% (+420 bps YoY). Group net bad debt is up by 25 bps to 1.8%, and cash NTM remains flat at 3.9%.

US transactions increased by 34.5% to 60.9 million, with active customers increasing by 9.3% YoY and merchants up by 24.6% to 30.8k. US cash EBTDA increased by 51.4% YoY to US$154.7M with an operating margin of 25%, an increase of 113 bps YoY. The US has a customer TAM of 100 million+ low- to middle-income Americans that have been underestimated by traditional financial services providers.

The US segment has growing customers and deepening engagement, with transactions per customer increased by 23.1% to 13.1 and spend per customer increased by 30.55% YoY to US$1,851, supported by continued investment in Pay-in-z to enhance flexibility, uptake of physical cards in spending in store, accelerated merchant growth, and spending power limits.

ANZ has delivered strong earnings growth, as it almost doubles its cash EBTDA to A$69.5M, with an operating margin of 15.9%, which is a massive increase of 753 bps YoY. Merchants increased by 9.5% to 66.6k, and receivables increased by 9.4% to A$2.3B. The transaction per active customer grew by 16.4% YoY to 27.3, and total spend per active customer increased by 15.4% YoY to A$2,123.

ZIP has a strong and consistent cash flow generation with ample capacity to fund growth initiatives. Available cash and liquidity reached A$246.5M with a strong cash inflow of A$256.6M. ZIP has increased its secured funding facilities limits to A$3.28B and total drawdown of A$2.74B, with cost of funds declined to 6.74%.

Outlook

ZIP is well positioned to deliver the next phase of growth, led by demand, innovation, and investment for long-term scale. The management has given revenue guidance for FY27 to grow by circa 8%. The cash NTM will be in the range of 3.8-4.0% of the TTV. Operating margin is expected to be around 20-22% for FY27. The cash EBTDA will continue the same growth momentum to A$340M in FY27.

(Source: Company Announcements)