Shares of Zip Co, an Australian-based digital financial services firm, surged nearly 16% on Tuesday after the company reported a significant boost in its first-half cash earnings and issued an upbeat annual earnings forecast, surpassing market expectations.
For the six-month period ending December 31, Zip’s earnings before taxes, depreciation, and amortization (EBTDA) more than doubled to A$67 million (about $42.46 million), compared to A$30.8 million in the same period last year. This impressive growth was driven by higher transaction volumes, increased revenue, and better debt arrears performance.
In particular, Zip’s U.S. business saw a notable 40.3% rise in transaction volumes during the first half, largely due to strong holiday trading and improved customer engagement. Additionally, the company’s Australia and New Zealand (ANZ) business showed positive growth in the second quarter.
Zip also raised its full-year cash EBTDA forecast for fiscal 2025, now expecting to reach at least A$147 million, slightly ahead of Visible Alpha consensus expectations.
As a result of these strong results, Zip’s shares saw their biggest one-day gain since January 2024, outperforming the broader ASX 200 index, which was down 0.9% at the time. Investors responded positively to the strong financial performance and optimistic outlook, making Zip one of the top performers on the ASX 200.
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