Can Zip Co Maintain Momentum Amid Dual Listing Uncertainty and CEO Move?

Strong Half-Year Results Signal Momentum

Zip Co Limited (ASX: ZIP) has reported a robust first half of fiscal 2026, posting record cash earnings before tax, depreciation, and amortisation (EBTDA) of $124.3 million, an 85.6% increase compared to the same period last year. The company’s operating margin expanded significantly to 18.7%, reflecting improved profitability and operational leverage across its core markets.

The surge in earnings was underpinned by a 34.1% rise in total transaction volume (TTV) to $8.4 billion and a 29.2% increase in total income to $664 million. While the revenue margin slightly dipped to 7.9% from 8.2%, this was attributed to a higher proportion of US transactions, which now represent 75% of total volume.

US Market Drives Growth and Innovation

The US business remains Zip’s growth engine, delivering a 44.2% increase in TTV to US$4.1 billion and a 46.4% rise in revenue to US$292 million. Active customers in the US climbed 9.7% to 4.6 million, boosted by strategic marketing partnerships with sports franchises like the Philadelphia Phillies and Comcast Spectacor. Customer engagement deepened, with spend and transactions per customer rising by 31% and 20%, respectively.

Zip’s expansion of its Pay-in-2 instalment solution to all US customers in February 2026 marks a strategic push to capture everyday, non-discretionary spending such as groceries and utilities. Early pilot feedback was overwhelmingly positive, with 95% of participants indicating they would use the service again. The company also advanced its AI capabilities, launching Zia, an AI-powered virtual agent that has improved customer self-service and satisfaction.

ANZ Market Shows Resilience and Growth

In Australia and New Zealand, Zip’s TTV grew 9.7% year-on-year, supported by the adoption of Zip Plus and strong holiday trading. The region saw a remarkable 138% increase in cash earnings, with net bad debts remaining stable and within management’s strategic targets. Merchant additions continued, with over 6,000 new merchants joining the platform, including notable names across retail and services.

Capital Management and Strategic Outlook

Zip completed a $100 million on-market share buyback, repurchasing 34.9 million shares at an average price of $2.86, reflecting confidence in its growth trajectory. The company also secured new funding facilities in both the US and Australia, improving cost of capital and liquidity, with $537 million in total cash on hand as of December 2025.

Looking ahead, Zip reaffirmed its FY26 guidance, upgrading operating margin expectations to above 18% and cash EBTDA as a percentage of TTV to greater than 1.4%. The company anticipates US TTV growth exceeding 40% in USD terms, balancing profitability and credit risk.

Leadership and Dual Listing Considerations

Reflecting the growing importance of the US market, CEO Cynthia Scott announced plans to relocate to the United States in the second half of 2026 to deepen engagement with key stakeholders and support Zip’s expansion. Meanwhile, the company continues to evaluate a potential dual listing on a US stock exchange, having submitted a confidential draft registration statement to the SEC in November 2025. Any decision will depend on market conditions and regulatory approvals.