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Buy-now-pay-later group Zip Co (ASX: ZIP) has posted record underlying cash earnings for the September quarter following a surge in transaction volumes in the US where the average spend and transaction numbers have increased sharply.
Zip Co posted cash EBTDA of $62.8 million for the first quarter of FY26, up 98.1 per cent compared to a year earlier, supported by a 38.7 per cent increase in total transaction volume (TTV) to $3.9 billion.
The US accounted for the bulk of the TTV growth, rising 51 per cent to $2.9 billion which was driven by growth from new and existing customers through the app and in-store.
Zip Co’s active customers in the US grew 12.2 per cent, or by more than 483,000, year-on-year which the group says provides strong momentum heading into the holiday trading period.
Customer engagement also improved in the US with average spend and average transactions per customer increasing 27.4 per cent and 17.8 per cent year-on-year respectively.
Total transaction volumes in Australia and New Zealand rose 11.1 per cent to $968.4 million.
However, the number of active customers in ANZ fell 7.4 per cent to two million, compared with a year earlier, while US numbers were up 5.3 per cent to 6.4 million.
The US market delivered a 51.1 per cent increase in revenue to US$139.2 million ($214 million) for Zip Co while TTV in US-dollar terms was up 47.2 per cent to US$1.91 billion.
The level of net bad debts across the group’s TTV was steady at 1.6 per cent.
Zip Group CEO Cynthia Scott says the cash EBTDA of $62.8 million for the September quarter represents “sustainable, profitable growth at scale” for the group.
“This was underpinned by strong unit economics, material operating leverage and disciplined execution, driving a significant increase in operating margin to 19.5 per cent,” she says.
“We are committed to delivering exceptional experiences for our customers, with engagement deepening across both markets.
“Following a strong start to the year, we have upgraded our expectation for US TTV growth to be above 40 per cent (in USD) for the year and reconfirm the remainder of our target ranges as previously announced in August.
“We remain focused on executing our strategic priorities of growth and engagement, product innovation and platforms for scale.”
A strengthened balance sheet has prompted Zip Co to double the limit on its share buyback announced in April this year to $100 million.
The original $50 million buyback was for a period or 12 months and, as of 3 October 2025, Zip says it bought 17.8 million shares for a total of $43.4 million.
“The increase in the on-market share buy-back is consistent with Zip’s capital management framework and reflects the strength of the Zip balance sheet, the continued delivery of operating cash flows and Zip’s outlook for future profitable growth,” says the company.
Zip Co adds that, in line with an announcement in August this year, the company is still eying a potential dual listing on the Nasdaq, while maintaining its primary listing on the ASX.
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