Zip (ZIP) H2 2024 earnings summary

Executive summary

• Achieved record profitability in FY24, with four consecutive quarters of profitable growth, strong revenue growth, and disciplined cost management driving significant operating leverage.

• Simplified, debt-free balance sheet after 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 with a clear strategy for FY25.

• Strategic focus on profitable growth, 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% year-over-year to AUD 868 million, with revenue margin up 96 bps to 8.7% of TTV.

• Group transaction volume (TTV) reached AUD 10.1 billion, up 14% year-over-year.

• Normalized group cash EBITDA was AUD 69 million, a AUD 117 million turnaround from FY23; underlying cash EBITDA was AUD 79 million.

• Cash gross profit rose 52.8% to AUD 372.9 million.

• Statutory net profit before tax was AUD 25.1 million, and net profit after tax was AUD 5.7 million, marking the first statutory profit in company history.

Outlook and guidance

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

• Cash EBITDA margin 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 growth opportunities in both core markets for FY25 and beyond.