Zip shares climb on Q1 growth, US guidance upgrade
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More news: Zip shares rallied in morning trade after the buy now pay later lender reported a rise in total transaction volume for the first quarter and upgraded its US growth target.
Shares were up 4.4% to $4.62 at 11:35am AEDT, taking 12-month gains to 61.9%.
RBC Capital Markets analyst Jack Lynch described it as a "positive result" during a "seasonally challenging quarter".
Zip upgrades US growth target, doubles buyback limit
The news: Buy now pay later provider Zip has reported a jump in total transaction volume (TTV) for the first quarter, and upgraded its full-year growth target for its US business.
The numbers: Zip recorded first-quarter TTV of $3.9 billion, up 38.7% compared to the prior corresponding period.
In the US, TTV and revenue increased 47.2% and 51.2% respectively, with customer growth of 12.2%, or 483,000 year over year.
Zip has upgraded its expectation for US TTV growth to be above 40% for the year. Its previous guidance was for above 35% growth.
At a group level, total income of $321.5 million for the period was up 32.8% year on year. Cash earnings surged 98.1% to $62.8 million.
Zip has also increased the limit of its ongoing share buyback program from $50 million to $100 million. The company announced the program in April for a period of up to 12 months. As at 3 October, it had repurchased 17.8 million shares for a total of $43.4 million.
The context: Zip CEO and managing director Cynthia Scott said earnings were driven by "strong unit economics, material operating leverage and disciplined execution, driving a significant increase in operating margin to 19.5%."
The company said the increase in its buyback limit reflected "the strength of Zip's balance sheet, the continued delivery of operating cash flows and Zip's outlook for future profitable growth."
Zip noted that it is continuing to consider a dual listing on the Nasdaq, while maintaining its primary listing on the ASX. The potential dual listing remains subject to board approval and regulatory approvals in the US.
