Zip shares climb 10% as FY guidance tops estimates
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More news: Zip shares surged more than 10% in early trading, despite the buy now pay later provider reporting a slide in first-half net profit.
Zip shares were up 10.7% to $2.64 at 11:30am AEDT, having slumped last month following softer-than-expected Q2 earnings.
UBS analysts noted that gross profit of $236 million was up 30% year on year and 7% ahead of consensus estimates of $220 million. They also flagged that Zip's full-year cash EBITDA guidance of $147 million came in higher than average forecasts of $145 million.
Zip reports 69% drop in HY profit, missing estimates
The news: Buy now, pay later lender Zip posted a 69% fall in first-half net profit to $23 million, as operating costs climbed over 10%.
The numbers: Analysts polled by Visible Alpha had expected Zip's profit for the six months to December 2024 to fall to $49.6 million, down from $73 million last year.
Zip reported total transaction value (TTV) of $6.2 billion, up 23.9% year on year. The company saw total income grow 19.8% to $514 million as its active customer base climbed 1.5% to 6.3 million.
The context: Zip said the result was supported by growth in its US business, driven by an "exceptional" holiday trading period and deeper customer engagement. Zip's ANZ business returned to growth in the second quarter following an 18-month period focused on margin improvement, the company noted.
Elsewhere, Zip's Australia and New Zealand CEO and co-founder Peter Gray will transition to a newly created role of head of strategic growth, to focus on accelerating the company's growth agenda across both ANZ and the US.
Soraya Alali has been appointed as Zip's new ANZ CEO and will commence on 12 May. Alali previously held leadership roles at National Australia Bank and Commonwealth Bank.
The sources: ASX release, UBS research
