Zip Co Limited – 2025 Half-Year Results Summary
Website: www.zip.co
Overall Report Tone
Zip Co’s interim report shows strong revenue growth, but profitability concerns persist with a 69% decline in net profit. The company continues to benefit from strong US market expansion, but higher bad debts and interest costs weigh on the bottom line.
Financial Results (Per Share Focused)
| Metric | 1H 2025 | 1H 2024 | % Change |
|---|---|---|---|
| Revenue ($M) | 509.2 | 425.5 | ▲20% |
| Adjusted EBITDA ($M) | 67.0 | 30.8 | ▲117% |
| Operating Cash Flow ($M) | 95.4 | 113.7 | ▼16% |
| Net Profit After Tax ($M) | 23.0 | 73.0 | ▼69% |
| Total Comprehensive Income ($M) | 45.1 | 57.2 | ▼21% |
| Net Tangible Assets per Share (cents) | 27.17 | 9.75 | ▲179% |
New Information from Latest Report
- Revenue grew 20% to $509.2M, supported by strong US TTV growth (+39%).
- Net profit down 69%, due to higher interest costs and increased bad debts.
- Adjusted EBITDA rose 117%, reflecting improved operational leverage.
- Cash EBTDA of $67.0M, up from $30.8M, indicating stronger core profitability.
- Significant growth in US market:
- TTV up 39% YoY.
- Revenue up 41% YoY.
- ANZ business saw TTV decline (-1.2%), reflecting credit tightening and macroeconomic conditions.
- Receivables increased to $2.59B (+8.1%), with bad debt provision up to 6.3%.
Positive Surprises & Potential Concerns
✅ Strong revenue growth (20% YoY) driven by US expansion.
✅ Adjusted EBITDA doubled, showing operational efficiency gains.
⚠️ Net profit down 69%, largely due to higher funding costs and bad debt provisions.
⚠️ ANZ business lags, with TTV declining 1.2%, suggesting weaker domestic demand.
Result vs Market Expectations
📈 Revenue of $509.2M suggests Zip is tracking ahead of the full-year forecast of $1,042.33M.
📉 Net profit decline raises concerns about earnings sustainability.
📈 Cash EBTDA and adjusted EBITDA were strong, indicating operational improvements.
📉 Higher bad debts (6.3% of receivables) may impact long-term margins.
Outlook & Guidance
🔹 US market remains the key driver of growth, with expectations of further expansion.
🔹 ANZ segment remains challenging, requiring further product innovation and marketing investments.
🔹 Higher interest costs expected to continue impacting profitability.
🔹 Bad debt management remains a key focus area.
Market Positioning
Analyst Positioning (Based on Provided Forecasts)
- 1H revenue ($509.2M) suggests full-year revenue could exceed the $1,042.33M estimate.
- EBITDA performance is strong, but net profit weakness may lead to downward revisions.
- FY26 revenue forecast of $1,216.41M seems achievable, but EBITDA expectations ($182.24M) may be optimistic.
- Credit risk and interest expense remain key factors impacting future profitability.
Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.
Quick Take: Interim Report ASX:ZIP