ZIP ripped on record growth numbers… and there’s more to come

This interview was recorded Monday 25 August, 2025

Last week, ZIP Co (ASX: ZIP) delivered one of the standout results of the reporting season, with the share price climbing more than 20% on the day of release and following up with another 7% gain yesterday. The market’s enthusiasm was well earned. 

In the United States, the company’s growth engine, total transaction volumes (TTV) jumped 41.6% year-on-year, while customer numbers rose 11%. Overall, bad debts also improved, falling from 1.7% to 1.5% of TTV, which contributed to operating margins expanding from 7.9% to 15.8%. EBTDA soared 147% to $170.3 million.

But the numbers only tell part of the story. ZIP’s management believes there is far more growth to come, particularly as the company continues to deepen its presence in the US and innovate around its customer offering. As CFO Gordon Bell told me: 

“With the last 12 and 24 months’ experience under our belt, we felt it was appropriate to give a number for the coming 12 months of greater than 35% growth [in US TTV].

We’ve got a lot of great initiatives underway to drive that growth… product innovation with our Pay-in-8 and our Pay-in-2 products, our relationship with Stripe, and our innovation arm, Fearless Frontiers, which is going to drive the new areas of product development and customer loyalty.”

In our conversation, Bell discussed ZIP’s growth trends, the positive tailwinds from potential US rate cuts, the company’s evolving product suite, and how a potential Nasdaq listing could unlock further opportunities.

Watch the interview above for the full insights, or read a summary below. 

INTERVIEW SUMMARY

Record financial performance

Bell opened by emphasising FY25 as a “defining year” for ZIP, with cash earnings up 147% to $170.3 million. The company crossed $1 billion in total income, while the US business alone generated more than US$100 million in earnings. 

Total transaction volume rose 30% to $13 billion, active customers increased to 6.3 million, and operating margins doubled to 15.8%. Importantly, this growth came while maintaining discipline on credit quality.

US growth and customer focus

The US remains ZIP’s growth powerhouse, with TTV up 41.6% and revenue up 43.7% year-on-year. Bell highlighted the focus on the “everyday American” - a cohort of 100–120 million people underserved by traditional finance. 

Growth has been strongest in non-discretionary categories such as household bills and insurance, which makes volumes more repeatable. Product expansion has also played a role, with “Pay-in-8” and “Pay-in-2” adding flexibility alongside the core "Pay-in-4.”

Impact of rate cuts

Bell said potential US rate cuts would benefit ZIP in two ways: boosting consumer sentiment and lowering funding costs. 

Since funding is tied to floating rates, reductions in Australia or the US would act as a direct tailwind, while improved sentiment would reinforce customer activity.

Managing bad debts

Bad debts fell to 1.5% of TTV, the lowest in two years. Bell attributed this to being “hypervigilant” in underwriting and monitoring customer behaviour. 

Both US and Australian operations contributed, showing resilience in challenging environments. He expressed confidence that the settings are in place to manage credit risk while supporting growth.

Outlook and innovation

ZIP expects greater than 35% growth in US transaction volumes in FY26. Bell pointed to product innovation, the Stripe aggregator partnership, and the Fearless Frontiers innovation arm as key drivers. 

Initiatives such as the AI-enabled “money coach” are in the pilot stage, designed to enhance customer loyalty and cashflow management.

Potential Nasdaq listing and capital management

With over 80% of divisional earnings now coming from the US, ZIP is exploring a dual Nasdaq listing to tap deeper into international investor interest. Bell stressed that while the process requires time and board approval, it could support liquidity and reduce the cost of capital.

On capital management, Bell noted that ZIP has completed $30 million of its $50 million buyback but remains committed to balancing shareholder returns with reinvestment. Marketing, co-branding, and innovation spending are being prioritised to sustain growth momentum.