Half Year 2026 Zip Co Ltd Earnings Call Transcript
Key Points
- Zip Co Ltd (ZIZTF) reported record cash earnings of $124.3 million, marking an 86% increase, driven by significant operating margin expansion to 18.7%.
- The company achieved a 34% year-on-year increase in total transaction volume, reaching a record $8.4 billion.
- Active customer numbers grew by 4.1% to 6.6 million, with a 10% increase in the US, indicating strong demand and customer trust.
- Merchant growth accelerated by over 10%, supported by expanded channel partnerships, including with Stripe.
- Zip Co Ltd (ZIZTF) maintained strong unit economics and operating leverage, with gross profit increasing by 33.5% due to lower funding costs and strong credit discipline.
- The Pay in 8 product, while popular, comes with higher losses due to its longer duration and larger average order value.
- The US business, despite strong growth, has a lower blended net transaction margin, which could impact overall profitability.
- There are concerns about the impact of foreign exchange rates, with potential headwinds affecting financial performance.
- The company's expansion and new product rollouts, such as Pay in 2, may lead to increased operational costs and require careful management to maintain profitability.
- The potential dual listing on the US stock exchange is subject to regulatory and board approvals, which could introduce uncertainty and delay.
Welcome to Zip Co Limited half-year '26 results.
(Operator Instructions)
I would now like to hand the conference over to Director of Investor Relations & Sustainability, Vivienne Lee. Please go ahead.
Good morning and thank you for joining Zip's 2026 half-year results briefing.
To open, I'd like to begin by acknowledging the traditional owners of the land on which we meet today, the Gadigal of the Eora Nation; and pay our respects to elders, past and present.
This conference call is also being webcast and will be available on Zip's website.
I'm joined today by Zip's Group CEO and Managing Director, Cynthia Scott; Group CFO, Gordon Bell; and US CEO, Joe Heck.
We will start this call with some prepared remarks; and then, open up the Q&A.
With that, I'll now hand over the call to Cynthia.
Thanks, Vivienne. Good morning, everyone.
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