Zip shares jump nearly 17% as Australian BNPL firm returns to profitability

Zip Co

24/10/2023 01:23

Oct 24 (Reuters) - Shares of Australia's Zip Co Ltd
 ZIP.AX  jumped nearly 17% on Tuesday after the
buy-now-pay-later (BNPL) company returned to profitability
earlier than projected in the first quarter of fiscal 2024 as
domestic operations improved.
    Shares in the company rose as much as 16.7% to A$0.350 by
1140 GMT, marking their biggest intraday percentage increase
since Jan. 23. The stock is currently trading at a one-week
high.
    Zip, Australia's biggest standalone BNPL service provider,
said it returned to cash earnings before taxes, depreciation,
and amortization (EBTDA) profitability in the first quarter of
fiscal 2024, ahead of its prior guidance for the first half.
    Owing to the strong performance of its domestic and New
Zealand businesses and continued strength in the U.S. total
transaction volumes, Zip upgraded its forecast with an aim to
touch cash EBTDA profitability for FY24 from a prior projection
for the second half of fiscal 2024.
    "Zip continues to expect to achieve a positive Group cash
EBTDA result for 2H24 and following a particularly strong start
to the year, Zip now expects to achieve a positive Group cash
EBTDA result for FY24," CEO and Managing Director Cynthia Scott
said.
    The company logged a total transaction volume (TTV) of A$2.3
billion ($1.46 billion) for the first quarter, an increase of
11% over last year. Group revenue came in at A$204.4 million, up
31.9% from a year earlier.
    U.S. bad debts continued to perform well with monthly cohort
loss rates of about 1.3% of TTV, below the target range of 1.5%-
2.0%, Zip added. 
    
($1 = 1.5783 Australian dollars)

 (Reporting by Roushni Nair in Bengaluru; Editing by Subhranshu
Sahu)
 ((Roushni.Nair@thomsonreuters.com;))