Zip Co’s FY25 Results Mark a Turnaround Built on US Growth and Operational Discipline
Zip Co (ASX: ZIP) has delivered a strong set of full-year results for FY25, underscoring its transformation from a high-growth, capital-intensive fintech into a more balanced and operationally disciplined business. The standout performance came from the US, now the group’s primary growth engine and accounting for more than 70% of transaction volume and over 80% of divisional cash earnings.
Group cash EBTDA surged 147% to $170.3 million, supported by a 30.3% increase in total transaction volume (TTV) to $13.1 billion. Operating margin more than doubled to 15.8%, driven by improvements in both unit economics and credit performance.
Zip’s Chief Executive Officer, Cynthia Scott, characterised the year as a pivotal one for the group. “We achieved several milestones, including delivering over $1 billion in total income and generating more than US$100 million of cash earnings in the US. Disciplined execution and strong unit economics underpinned our performance,” she said.
US Business Drives Performance
The US business led the charge, with TTV increasing 41.6% year-on-year (in USD) to US$6.0 billion—well ahead of the broader market growth for instalment products, estimated at 30–32%. Revenue rose 43.7% in USD terms, reflecting improved customer engagement, increased in-store spend, and growing adoption of Zip’s Pay-in-8 product, which comprised 18% of Q4 TTV.
Customer metrics also improved markedly: active customers rose to 4.3 million, while average spend and transaction frequency per customer increased by 27.6% and 20.3% respectively. Zip also expanded its merchant base in the US and deepened relationships with channel partners such as Google Pay, Chrome Autofill, and Stripe.
Credit performance in the US remained within target, with bad debts held in the 1.5–2.0% range.
ANZ Returns to Growth
In Australia and New Zealand, the company returned to growth with a 5.5% lift in TTV to $3.7 billion. While revenue declined marginally by 0.9%, this was offset by improved portfolio yield, which rose to 19.3%, and an excess spread of 8.7%—up 331 basis points year-on-year. The Zip Plus product continued to gain traction, with receivables up 96% since launch and customer engagement materially higher than Zip Pay.
The ANZ business also launched its Zip Personal Loan in January 2025, further diversifying its product suite. Strategic merchant additions in health, retail and travel verticals supported ongoing customer engagement.
Strengthened Balance Sheet and Capital Management
A key theme in FY25 was the consolidation of Zip’s capital position. The company repaid all corporate debt following a $267 million equity raise in H1 and ended the year with $137.8 million in available liquidity, up from $80.4 million. By July 2025, this had increased to $230.8 million, thanks to additional short-term funding capacity.
Funding initiatives included the refinancing of $2.0 billion in Australian receivables at lower margins and the establishment of a new $400 million five-year warehouse facility. In the US, Zip increased its funding capacity to US$300 million.
An on-market buyback program, launched in April 2025, saw $29.8 million worth of shares repurchased during the year.
Nasdaq Listing Under Consideration
In a move reflecting the company’s increasingly international profile, Zip is considering a dual listing on the Nasdaq while maintaining its primary listing on the ASX. The potential listing is designed to align Zip’s capital markets presence with its growing US operations and rising offshore investor interest, which now accounts for approximately 16% of issued capital. The listing remains subject to board and regulatory approvals.
FY26 Outlook
Zip has issued upgraded guidance for FY26, including:
US TTV growth of over 35% (in USD)
Group revenue margin of approximately 8%
Cash net transaction margin between 3.8% and 4.2%
Operating margin between 16.0% and 19.0%
Cash EBTDA exceeding 1.3% of TTV
While the macroeconomic backdrop—particularly in the US—remains dynamic, Zip appears well-positioned to maintain momentum into FY26, supported by a focused strategy centred on product innovation, credit discipline, and operational leverage.
The business has come a long way from its earlier cash-burning phase, and FY25 represents a significant turning point in Zip’s path to sustained profitability and international relevance.