Zip rallies on FY25 results. Here's what you need to know
Zip shares rallied as much as 25% after beating FY25 earnings expectations and guiding to strong growth in FY26.
Mentioned
KEY POINTS
- ZIP delivered record $79.9 million profit (up 1,110% year-on-year) beating analyst expectations, marking the company's transformation to sustainable profitability.
- US business is driving growth with 46% revenue increase while representing over 80% of divisional cash earnings, prompting potential Nasdaq listing.
- FY26 guidance exceeded expectations with US transaction volume growth of 35%+ significantly beating UBS forecasts of ~25%.
It feels like 2020-21 again, with Zip (ASX: ZIP) shares surging as much as 25% in early trade after the company reported a bumper FY25 result and robust FY26 guidance.
The key takeaway: Zip is now a profitable business that's cementing its position in the mature Australian market while accelerating growth in the US.
FY25 key numbers
The key operational and financial metrics for FY25 were broadly ahead of consensus expectations, including:
Total transaction value up 30.3% to $13.0bn vs. $13.0bn ests (in-line)
Revenue up 23.5% to $1.08bn vs. $1.07bn ests (0.7% beat)
EBTDA up 116% to $170.3m vs. $160m ests (6.4% beat)
NPAT up 1,110% to $79.9m vs. $71.8m ests (11.3% beat)
EPS up 785.7% to 6.2 cents vs. 6.7 cents ests (7.5% miss)
The regional breakdown highlights a steady ANZ business, while the US is firing on all cylinders:
Revenue: US up 46% vs. ANZ down 0.9%
Total transaction volumes: US up 43.9% vs. ANZ up 5.5%
Transactions: US up 33.6% vs. ANZ up 12.6%
Active customers: US up 11% vs. ANZ up 6.8%
Overall, the company's ability to beat market expectations across most metrics drove today's rally.
Strong FY26 outlook
Zip's FY26 outlook exceeded expectations, particularly for US growth:
US TTV growth greater than 35% (in USD), balancing profitability and loss performance. US TTV performance in July 2025 tracked in line with FY25
Group revenue margin of circa 8%
Group cash net transaction margin upgraded to between 3.8% - 4.2%
Group operating margin upgraded to between 16.0% - 19.0%
Group cash EBTDA as a % of TTV to be greater than 1.3%
This guidance materially beats UBS's prior expectation of approximately 25% US TTV growth, providing another catalyst for the rally.
Potential US listing
Zip is exploring a dual listing on the Nasdaq, citing compelling reasons:
US operations now generate over 80% of divisional cash earnings
Growing US investor interest, with offshore institutional investors holding approximately 16% of issued capital
This move could prove significant. Sezzle's ASX delisting in late 2023 preceded strong gains on the Nasdaq, though company-specific factors also played a role.
Sezzle (red) vs. Zip (blue) comparison over the last twelve months (Source: TradingView)
The bottom line: Zip is crushing it, with both better-than-expected numbers for FY25 and FY26 TTV guidance for the US. The magnitude of these beats will likely attract consensus upgrades and target price increases. Though the stock is a little extended after rallying over 200% since Liberation Day lows.
