Zip (ZIP) H2 2024 earnings summary

Executive summary

• Achieved record profitability in FY24, with revenue up 28.2% to AUD 868 million, driven by strong TTV growth in the Americas and yield expansion in ANZ, and significant operating leverage from disciplined cost management.

• Delivered the first statutory profit in company history, with net profit after tax of $3.7m, reversing substantial prior year losses.

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

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

• No dividends declared for FY24.

Financial highlights

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

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

• Group TTV reached AUD 10.1 billion, up 14% year-over-year; Americas TTV up 39.5% to $6.5b, ANZ TTV down 14.5% to $3.6b.

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

• Net bad debts as a percentage of TTV improved by 18 bps to 1.6%-1.7%.

Outlook and guidance

• Targeting revenue margin of 8%-9% and cash NTM of 3.5%-4% over the next two years, with US business contribution expected to rise.

• 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.

• Executive and NED remuneration in FY25 to be reviewed for competitiveness, with variable pay weighted towards profitability.