Buy now pay later group Zip has reported record cash earnings for the first half after an “outstanding performance” by its US business, with full year guidance higher than what analysts have pencilled in.
The group’s cash earnings before taxes, depreciation and amortisation (EBTDA), its preferred measure, came in at $67m, up 117 per cent on the prior corresponding period. EBTDA including expected credit losses of $35m, below Citi’s forecast of $48m.
Chief executive Cynthia Scott said the group expects to deliver cash EBTDA of at least $147m for FY24. This is 4 per cent ahead of Citi’s estimates of $142m and 2 per cent above VA consensus expectations.
Statutory net profit after tax fell 68.4 per cent to $23m. Australian revenues lifted to $302.9m in the six months to December 31, while its US revenue grew to $199.5m ($314m). The number of merchants on its platform lifted 7.6 per cent to 81,900, but customer growth remained relatively flat, up 1.5 per cent to 6.3 million.
Ms Scott highlighted total transaction volume grew 40.3 per cent over the holiday period in the US. “We are well positioned for our significant growth opportunity as we scale more flexible payment solutions to meet the needs of everyday Americans and leverage our merchant and channel partnerships to expand into new verticals,” she said. Zip does not have a dividend policy. Its share price last at $2.38, up 154 per cent on where it was this time last year.
ZIP Price at posting:
$2.77 Sentiment: Hold Disclosure: Held
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