Ann: Quarterly Update, page-3

GROUP HIGHLIGHTS ● Achieved full year FY20 revenue of $161.2m (up 91% on FY19), with record quarterly revenue of $46.4m (up 72% YoY). ● Achieved $2.3bn in annualised transaction volume1 (vs target $2.2bn) in FY20, with quarterly volume of $570.7m (up 62% YoY). Transaction numbers were up 120% YoY. ● Receivables increased to $1.2bn, up 73% YoY. ● Customers increased to 2.1 million, up 63% YoY (197k added in quarter). ● Merchants on the platform increased to 24.5k, up 51% YoY. ● Strong credit performance notwithstanding COVID-19 with net bad debts of 2.24% at the end of Q4, in line with expectations and significantly outperforming the market. ● Monthly arrears, a forward indicator of future losses, reduced from 1.55% in March to 1.33% in June – an outstanding result in the current climate. ● Announced the acquisition of US-based BNPL company QuadPay together with an investment of up to $200m from Susquehanna Investment Group (SIG) to accelerate Zip’s global expansion strategy and drive growth. The transaction is subject to a number of closing conditions, including shareholder approval at the EGM expected to be next month. ● QuadPay delivered a very strong Q4 across its core metrics, benefiting from the surge to online – $233m2 in TTV (annualising at $0.9bn), $16.4m2 in revenue (annualising at $66m) and 1.8m customers. 1 Transaction volumes for Zip AU & NZ only, annualised based on Q4 FY20. 2 All figures in AUD, converted at USD: AUD FX rate of 0.70 Zip Co Limited • ACN 139 546 428 2 Level 14, 10 Spring Street, Sydney NSW 2000 • zip.co ● Post completion, Zip will emerge as a global BNPL leader across 5 markets (AU, NZ, US, UK and SA) with pro-forma annualised TTV of $3.2bn3, annualised revenue of $252m and 3.9m customers4. Managing Director and CEO Larry Diamond said: “We are very pleased with the results for the full year FY20, and in particular Q4, as Zip continued to deliver on its ANZ strategy whilst accelerating its global growth ambitions. This was testament to the hard work of the entire Zip team and the support of our 24.5k retail partners. The business model was tested during COVID-19 and proved extremely resilient – in terms of transaction volume, strong revenue mix and outstanding customer repayment performance. Our product differentiation, strong proprietary credit platform and penetration into defensive, everyday spend categories delivered in spades. Zip is well funded and uniquely positioned to continue to trade and grow in the current environment. Pleasingly, we beat the goals we set for the Company in 2019 with a target of $2.2bn in annualised transaction volume, which was supported by a number of marquee merchants and a top-10 rated app. We continue to believe the credit card model is fundamentally broken with customers demanding flexible, responsible, interest free alternatives – the flight to BNPL is indeed a global trend. The recently announced QuadPay transaction is an important step in our global expansion and provides access to the world’s largest retail market, the USA ($5tr and 15x Australia)