ZIP +18.22%: delivered a strong FY26 result with an in line revenue number and FY27 guidance pointing to another material step-up in profitability. Revenue was in line with expectations, but the more interesting part of the story is the operating leverage now coming through as the US business scales.
Key results:
- Revenue of A$1.34bn, up 25% and in line with consensus.
- Gross profit of A$642.3m.
- Net profit of A$116.4m, up 46%, vs. 117.3m expected.
- Transaction volume of A$16.65bn.
- Active customers of 6.5m across 97,400 merchants.
For FY27, management expects US transaction volumes to grow by more than 30% in USD, while group operating margins are targeted to expand to 20–22%. Cash earnings (EBTDA) guidance of A$340m implies ~26% growth, broadly matching the pace of revenue expansion and demonstrating that ZIP can continue investing for growth without sacrificing profitability.
MM’s view: ZIP today is a very different proposition from the growth-at-all-costs BNPL business investors remember from a few years ago. The US has become the engine room, margins are expanding allowing profits to grow quickly. Credit losses remain the obvious swing factor, particularly if the US consumer weakens, but provided ZIP can keep losses contained while delivering 30%+ US volume growth, we think the earnings trajectory remains compelling.
MM remains long and bullish ZIP
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