Zip Co surges 17% as FY26 profit jumps, FY27 outlook strengthens

Zip Co shares surged 17% to A$2.97 after FY26 cash EBTDA rose 57.9% to $268.9 million.

The company guided to FY27 cash EBTDA of $340 million, representing 26 percent growth, in its results statement released Thursday.

Revenue rose 24.7 percent to $1.336 billion, while statutory net profit after tax climbed 45.7 percent to $116.4 million. Total transaction volume reached $16.7 billion, up 27.2 percent, with US TTV rising 42.5 percent in US dollars. US revenue grew 37.3 percent to $903.1 million, and ANZ revenue rose 4.6 percent to $432.9 million. Cash gross profit increased 26.2 percent to $642.3 million, and operating margin expanded 420 basis points to 20.0 percent.

The results mark a turnaround for the Sydney-based lender, which competes with Block's Afterpay and Affirm in the buy now, pay later market. Group net bad debts rose to 1.77 percent of TTV from 1.52 percent, though US bad debts of 1.7 percent stayed within the 1.5 to 2.0 percent target range.

For FY27, Zip expects US TTV growth of more than 30 percent in US dollars, a group revenue margin of about 8 percent, and an operating margin of 20 to 22 percent. The company completed $150 million of on-market share buybacks during FY26 and announced a further $50 million buyback for FY27. Available cash and liquidity rose to $246.5 million from $137.8 million a year earlier.

The guidance raise signals management expects US expansion to keep driving profitability. Investors will watch the 2026 annual general meeting, where Zip will seek approval for a share consolidation.

This article is for informational purposes only and does not constitute investment advice.