Zip Co Limited FY ’24 Financial Results

Zip Co Limited (ASX: Z1P) announced its financial results for the fiscal year 2024, showcasing a significant increase in revenue and profitability. The company reported a 28.2% rise in revenue to A$868 million and a statutory net profit before tax of A$25.1 million.

Transaction volumes grew by 14% year-over-year to A$10.1 billion, and the company saw a 9.6% increase in merchant numbers, with over 79,000 merchants on its platform.

The Americas business segment achieved a record cash EBITDA, marking a substantial turnaround from the previous year’s loss. Zip also emphasized its commitment to sustainability and gender balance, as well as its plans for strategic partnerships and product expansion in the coming fiscal year.

Key Takeaways

• Revenue increase: 28.2% to A$868 million in FY ’24.
• Net profit before tax: A$25.1 million.
• Transaction volumes: A$10.1 billion (14% increase YoY).
• Americas cash EBITDA: A$77.2 million.
• Merchant growth: 9.6%, over 79,000 merchants.
• Focus on strategic partnerships and product expansion for FY ’25.

Company Outlook

• Zip plans to leverage strategic partnerships and expand its product offerings in FY ’25.
• The company aims to capitalize on growth opportunities and create long-term value for shareholders, targeting improved financial metrics in the next two years.

Bearish Highlights

• Cash operating expenses increased by 2.6%, but adjusted costs showed a decrease.
• Addressing licensing requirements in states like Maryland due to CFPB regulations.

Bullish Highlights

• Americas turnaround: From a loss of A$24.1 million in FY ’23 to a profit of A$77.2 million in FY ’24 (420% increase).
• Cash net transaction margin expanded by 96 basis points to 3.8%.
• Simplified capital structure and eliminated all corporate debt.

Misses

• No significant misses reported in the earnings call.

Q&A Highlights

• Discussed performance in the US and growth expectations.
• The company expects Transactions Value (TTV) growth to exceed market projections of 30%-32%.
• Regulatory compliance with CFPB is being addressed.

Overall, Zip Co Limited’s fiscal year 2024 results indicate a strong performance with record profitability and significant growth in transaction volumes. The company is focused on strategic partnerships, product expansion, and improving customer engagement to drive future growth and value creation for shareholders.

Full Transcript – Zip Co Ltd (ZIP) Q4 2024:

Operator: Thank you for standing by, and welcome to the Zip Co Limited FY ’24 Results Briefing…

Rachel Cooper: Good morning, and thank you for joining Zip’s FY ’24 earnings call…

Cynthia Scott: Thanks, Rachel. Good morning, and welcome to Zip’s FY ’24 results presentation…

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