Zip Co Limited – 3Q FY25 Trading Update Summary
Website: www.zip.co
Overall Report Tone
Zip Co continues to build momentum across its core markets, showing accelerated growth and disciplined execution, particularly in the United States. The company has delivered its largest-ever quarterly cash earnings, resulting in an upgraded FY25 earnings guidance and strong indications of profitable scalability.
📊 Financial Summary (Per Share Metrics Not Disclosed)
| Metric | 3Q FY25 | 2Q FY25 | 1H FY25 | YoY Change (3Q vs 3Q24) |
|---|---|---|---|---|
| Revenue | $278.9m | $271.5m | $514.0m (1H) | ▲ 26.5% |
| TTV | $3.3b | $3.43b | $6.2b (1H) | ▲ 35.7% |
| Cash EBTDA | $46.0m | $21.0m (approx) | $67.0m (1H) | ▲ 219.4% |
🟢 Positive Surprises or Potential Concerns
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💰 Cash EBTDA hit a record $46.0m, up 219% YoY, and Zip upgraded FY25 guidance to at least $153m, up from $147m.
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🚀 US market strength continues, with TTV up 40.2% YoY and revenue up 44.1%, showing strong repeat customer engagement.
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📉 Revenue margin slightly declined to 8.6% (from 9.2%) due to higher proportion of lower-margin US volume.
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⚠️ Slight QoQ declines in ANZ TTV and active customer numbers, but still showing solid YoY improvement.
📈 Result vs Market Expectations
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✅ Exceeded expectations for EBTDA, driven by robust US growth and operational leverage.
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✅ Strong cost management, with opex growth contained to ~10%, contributing to operating margin lift to 16.5% in Q3 (vs 13.0% in Q2).
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⚠️ ANZ revenue fell 1.3% YoY, suggesting competitive pressures or maturing growth.
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✅ Credit quality remains strong, with net bad debts steady at ~1.6%, within or below management’s 1.5–2.0% target range.
🔮 Outlook and Guidance
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🔼 FY25 cash EBTDA guidance upgraded to at least $153m from $147m.
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🧱 Continued investment in ANZ and US product innovation, with strong performance from new offerings like Zip Plus and Pay-in-8.
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💳 $50m share buyback announced, showing confidence in capital position and outlook.
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📊 Zip reiterated its FY25 two-year strategic targets, suggesting no change to long-term goals despite macro uncertainties.
🧠 Deep Dive on What’s New in 3Q FY25 Compared to 1H FY25
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New FY25 guidance upgrade: Cash EBTDA now expected to exceed $153m, up from $147m (set in February).
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GameStop partnership expanded to online, and new US merchants like Temu and Tire Agent added—indicating deeper retail channel penetration.
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Cash and liquidity increased to $204.5m, up from $195.5m at 1H end.
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Portfolio yield in AU ticked up to 18.7%, indicating ongoing margin expansion.
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Operating margin hit 16.5% in 3Q25, up significantly from 13.0% in 2Q25—suggesting effective cost discipline and scale.
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.
ZIP Co (ASX:ZIP) Q3FY25 Update