Zip Co Sustains Strong Growth with US TTV Above 40% and Reaffirms FY26 Targets

US Market Drives Transaction Volume Surge

Zip Co Limited (ASX:ZIP) continues to capitalise on its strong foothold in the US, where total transaction volume (TTV) grew by more than 40% year-on-year in April, measured in USD. This growth is a key driver of the company’s overall momentum, with 4.6 million active customers and 29,000 merchants contributing to an annual TTV of approximately AUD 12 billion. The US segment now accounts for roughly three-quarters of Zip’s divisional volume, underscoring its strategic importance.

The company’s AI-powered underwriting models, which analyse over 1.4 billion unique data points, have enabled Zip to profitably serve a customer base often overlooked by traditional lenders. These consumers, many new to credit or rebuilding their credit profiles, demonstrate financial resilience and responsible repayment behaviour, with over 98% of transactions repaid in full. Zip forecasts credit losses for the US business to remain below 1.75% of TTV for the fourth quarter of FY26, comfortably within management’s target range.

Zip’s US growth story builds on its proven ability to underwrite more than US$25 billion in TTV across 192 million transactions, a scale that supports its claim as a responsible lender with a customer Net Promoter Score of +73, the highest among BNPL peers according to a recent YouGov survey.

ANZ Market Remains Resilient with Broad Customer Engagement

In the Australia and New Zealand (ANZ) region, Zip serves 1.9 million active customers and nearly 65,000 merchants, representing about 10% of the Australian adult population. The ANZ business contributes approximately AUD 4 billion in annual TTV and maintains a strong operating margin with cash gross profit margins around 19%. The customer base is diverse, spanning various income levels and demographics, with a roughly equal gender split and an average age of 40.

Spending patterns in ANZ show growth across essential categories such as utilities, insurance, groceries, and healthcare, alongside steady discretionary spending in dining and entertainment. Zip’s recent launch of ZMobile, a subscription-based offering powered by TPG Telecom, aims to provide customers with value-packed plans that help manage cost-of-living pressures. This new product is expected to generate an additional recurring revenue stream and deepen customer engagement through a capital-light model.

Financial Performance and FY26 Guidance Reaffirmed

Zip’s third quarter results, covering the period to March 2026, showed a 22.4% year-on-year increase in TTV to AUD 335.2 billion and a 41.5% jump in cash EBTDA to AUD 65.1 million. Active customers grew 3.5% to 6.3 million, while the merchant network expanded by 12.7% to 94,000. The company’s operating margin remained robust at over 18%, reflecting strong unit economics and scalable platform leverage supported by ongoing investments in AI.

Reaffirming its FY26 guidance, Zip targets group cash EBTDA of at least AUD 260 million, US TTV growth exceeding 40% (in USD), and an operating margin above 18%. The group revenue margin is expected to hover around 8%, with a cash net transaction margin between 3.8% and 4.2%. These figures align with the company’s recent upgrade of cash EBTDA guidance following record third quarter US growth and steady credit losses, as reported in April 2026.

Zip’s strategic focus on combining AI-driven credit models with innovative product offerings such as Pay-in-2 instalments and ZMobile positions it well to capture ongoing market opportunities. The company’s ability to maintain credit discipline while scaling transaction volumes will be critical as it navigates competitive and regulatory landscapes.

Investor Confidence and Market Position

Zip’s consistent performance and reaffirmed guidance come amid ongoing capital management initiatives, including a $50 million on-market share buy-back announced earlier this year. The company’s strong balance sheet and cash flow generation underpin its ability to invest in growth while returning value to shareholders. CEO Cynthia Scott’s leadership continues to drive execution across both core markets, with a clear emphasis on customer-first values and sustainable profitability.

With the US market still in an early growth phase and Zip’s differentiated underwriting approach gaining traction, the company’s trajectory will be closely watched as it reports full quarterly results. The expansion of subscription services and continued merchant network growth add further dimensions to Zip’s evolving business model.

Zip’s April update and Macquarie presentation reinforce its position as a leading BNPL player leveraging technology and data to unlock financial potential for millions of customers across two continents, a theme echoed in its recent record 3Q US growth and Pay-in-2 instalment offering expansion.