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3 clusters · 5 sources · 15 days · First seen · Last updated

Zip Co Ltd financial performance and US fraud incident

Overview

Zip Co Ltd reported strong FY25 results, including a 24.6% increase in total income to $1.35 billion and record cash EBITDA of $268.9 million. This growth was supported by a 27.2% rise in total transaction volume (TTV), driven largely by a 42.5% increase in the US market. CEO Cynthia Scott noted that US growth was fueled by non-discretionary spending in sectors such as health, education, and transport.

However, the company has faced significant share price volatility following a disappointing FY27 first-quarter update and the disclosure of a coordinated fraud event in the United States. This “external fraud event” involved individuals using legitimate credentials to execute unpaid transactions, costing the company approximately US$7.2 million (A$10.1 million) in cash operating expenses and bad debts. The incident impacted TTV and new customer growth during July and August.

Despite these challenges, Zip reported that Q1 FY27 TTV grew 18% to $4.6 billion and total income rose 17% to $376 million. While net bad debts increased to 1.97% of TTV, up from 1.65% the previous year, shares recently rebounded by more than 14% following a record sell-off. Analysts from UBS and Macquarie have maintained bullish views, suggesting the price drop presents a buying opportunity. To manage share price movements, Zip has announced a $50 million on-market share buyback and plans to seek shareholder approval for a one-to-five share consolidation at its upcoming AGM on November 19.

Entities

Zip Co Ltd · Cynthia Scott · UBS · Australian Securities Exchange · ASX

Timeline

  1. [BUSINESS] 2 sources
    Zip Co shares rebound after record sell-off following US fraud incident

    Zip Co shares rebounded 14% after a massive sell-off triggered by a A$10.1 million coordinated fraud event in the US, despite reporting strong quarterly transaction growth.

  2. [BUSINESS] 4 sources
    Zip Co Ltd shares face volatility following fraud event and quarterly update

    Zip Co Ltd shares have faced pressure following a US-based fraud event costing US$7.2 million and a first-quarter update showing increased net bad debts despite growth in total transaction volume.

  3. [BUSINESS] 2 sources
    Zip Co Ltd reports record cash earnings amid market volatility

    Zip Co Ltd reports record cash earnings of $268.9 million and 27.2% growth in transaction volume, despite a significant decline in share price over the last year.

Sources

communitynews.com.au · fool.com.au · ibtimes.com.au · raskmedia.com.au · realtid.se

This summary has been updated 1 time: see revision history