Zip Co Reports Record FY26 Profit with US Growth and NZ Exit

Zip Co Delivers Record Profit and Cash Earnings in FY26

Zip Co Limited (ASX:ZIP) has posted a standout financial year, with statutory net profit after tax soaring 46% to $116.4 million, underpinned by record cash earnings of $268.9 million, a 57.9% increase on FY25. Total transaction volume (TTV) across its core markets jumped 27.2% to $16.7 billion, fuelled predominantly by a 42.5% surge in the US market (in USD terms).

The company’s operating margin expanded by 420 basis points to 20.0%, reflecting material operating leverage as Zip scales its two-sided digital financial services platform connecting 6.5 million active customers and 97,400 merchants.

US Drives Growth with Strong Customer Engagement and Credit Discipline

The US business remains Zip’s growth engine, delivering a 42.5% rise in TTV and 44.3% revenue growth (in USD), supported by 9.3% active customer growth to 4.6 million. Customer engagement deepened, with transactions per active customer rising 23.1% and spend per customer up 30.5% year-on-year.

Zip’s underwriting prowess in the US is evident as net bad debts remained within its target range at 1.7% of TTV, supported by a short duration portfolio averaging seven weeks and an average order value of US$141. Over 98% of transaction volumes were repaid in full, underscoring disciplined credit risk management.

Merchant growth accelerated 24.6% to 30,800, boosted by enterprise additions such as Temu, Optimum, and JD Sports, and over 5,200 merchants added via the Stripe partnership. Embedded finance channels like Google Pay and Google Chrome autofill integration continue to scale rapidly.

ANZ Market Shows Step Change in Profitability Amid Customer and Merchant Expansion

In Australia and New Zealand, Zip nearly doubled cash earnings to $69.5 million with operating margin expanding 753 basis points to 15.9%. Revenue and Australian receivables grew 4.6% and 9.4% respectively, led by the success of Zip Plus, with customer engagement strengthening as transactions per active customer rose 16.7%.

Merchant additions in ANZ reached 5,800 in targeted verticals including The Iconic, Samsung, and Expedia Group. Zip also launched ZMobile, a capital-light mobile offering to existing customers, with plans to expand in FY27.

Notably, Zip announced an orderly wind down of its New Zealand operations in July 2026 to sharpen focus on its Australian and US businesses, reflecting strategic prioritisation.

Innovation and AI Integration Accelerate Customer Experience and Operational Efficiency

Zip continues to embed AI across its operations, with 100% of staff using enterprise AI tools to enhance workflows. AI-powered virtual agents Zia (US) and Zigi (AU) are improving customer support with personalised, faster service. Technology teams report 86% (US) and 57% (AU) of code is AI-assisted, accelerating development velocity.

The US expanded its Pay-in-Z platform with Pay-in-2, catering to everyday spend with transactions up 86% quarter-on-quarter in 4Q26. In Australia, Zip enhanced its mobile app with personalised chatbot features and launched a recurring payments hub.

Capital Management and Sustainability Initiatives Support Growth and Shareholder Returns

Zip completed $150 million in on-market share buybacks during FY26, returning value to shareholders while maintaining a strong balance sheet with no corporate debt. Available cash and liquidity stood at $246.5 million as of 30 June 2026, up 79% year-on-year, providing flexibility for growth initiatives.

On the sustainability front, Zip refreshed its strategy centred on Inclusion and Potential, Environment, and Governance and Risk. The company achieved 100% renewable electricity powering its operations, maintained strong customer Net Promoter Scores (+72 US, +76 ANZ), and reported a 79% employee engagement score. Zip also published its inaugural Sustainability Report aligned with Australian climate disclosure standards.

Board and Leadership Actions Reflect Growth Ambitions and Governance Strength

The Board plans to expand in line with Zip’s growth trajectory, including adding US-based directors to better align with its largest market. CEO Cynthia Scott will relocate to the US to drive strategy execution and stakeholder engagement. The company is also considering a potential dual listing on a US stock exchange, subject to shareholder and regulatory approval.

Executive remuneration was adjusted to remain competitive, with increases in base salary and long-term incentives for key executives, particularly in the US. The remuneration framework remains heavily weighted towards performance and shareholder alignment.

What to Watch Next

Zip’s FY27 guidance targets a 26% increase in cash EBTDA to $340 million and operating margin expansion to 20-22%, driven by continued US TTV growth above 30% (in USD) and sustained ANZ profitability. The company’s execution on AI-powered innovation, product expansion, and capital management will be key to watch, alongside the progress of the New Zealand exit and any developments on a potential US dual listing.

Investors should also monitor Zip’s ability to maintain disciplined credit risk management amid growth and evolving macroeconomic conditions, as well as how its sustainability commitments translate into long-term value.

With a robust platform and clear strategic priorities, Zip is positioning itself for the next phase of expansion in digital financial services.