Zip (ZIP) H2 2024 earnings summary

Executive summary

• Achieved record profitability in FY24, with group cash EBTDA of $69.0m, strong revenue growth, and disciplined cost management driving significant operating leverage.

• Simplified balance sheet by extinguishing all convertible notes and eliminating corporate debt as of July 2024.

• Standout performance in the US and continued profitability in ANZ, positioning for future growth.

• Strategic focus on growth, profitability, product innovation, and operational excellence delivered results.

• Launched new products: Zip Plus in Australia and Pay in 8 in the US.

Financial highlights

• Revenue increased 28.2% to AUD 868 million, with revenue margin up 96bps to 8.7% of TTV.

• Group TTV reached AUD 10.1 billion, up 14% year-over-year; merchant count grew 9.6% to over 79,000.

• Cash gross profit up 52.8% to AUD 372.9 million; cash net transaction margin rose to 3.8%.

• Net bad debts fell to 1.7% of TTV, down 18bps year-over-year.

• Normalized group cash EBITDA was AUD 69 million, a AUD 117 million turnaround; underlying cash EBITDA was AUD 79 million.

Outlook and guidance

• Targeting revenue margin of 8%-9% and cash NTM of 3.5%-4% over the next two years.

• Cash EBITDA targeted at more than 1% of TTV in FY25 and 1%-2% over two years.

• US TTV growth expected to exceed 30%-32% market rate in FY25.

• Focus on higher margin channels, scaling new products, and improving cost of sales through scale.

• Clear strategy to pursue identified growth opportunities in both core markets for FY25 and beyond.