ZIP’s Earnings Ahead: Can the FinTech Recover Its Growth Engine?

The next few months could be a defining moment for Zip Co Ltd (ASX: ZIP). Once one of Australia’s fastest-growing fintech companies, Zip’s share price and market position have faced huge ups and downs since the Buy-Now-Pay-Later (BNPL) boom lost steam. But its latest results, backed by a strong U.S. performance and a plan now under consideration for a potential Nasdaq dual listing, are reigniting investor interest. The question now is simple: has Zip finally rebuilt its growth engine, or is this just a short-term rebound?

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A New Chapter for Zip

Zip has reported one of its strongest sets of numbers in recent years. For the 2025 financial year, the company delivered cash earnings before tax, depreciation, and amortisation (EBTDA) of A$170.3 million, more than double the previous year’s result and ahead of market expectations.
Most of this growth came from the United States, where total transaction volume (TTV) – the total value of payments processed – rose 41.6% year-on-year. In other words, more customers are using Zip to pay for their purchases, and they’re spending more each time.
Equally important, bad debts, a long-standing issue for the BNPL sector, fell to 1.5% of TTV, showing that Zip’s customers are generally repaying their balances. Alongside these results, the company said it is evaluating a dual-listing structure, keeping its primary ASX listing while exploring a secondary Nasdaq listing, to broaden access to U.S. growth-focused investors and raise its profile in its strongest market, the United States.
These results pushed Zip’s share price sharply higher in August, confirming that the company’s turnaround strategy is gaining traction.

The US – Zip’s Growth Engine

The United States has become the cornerstone of Zip’s revival. In the past, Zip’s Australian business dominated its revenue, but the story has now flipped. The U.S. division now delivers more than 80% of divisional cash earnings, which signals a major shift in where the company’s future lies.
In the most recent quarter, Zip reported record quarterly group cash EBTDA of about A$62.8 million, up roughly 98% year-on-year. Total transaction volume for the quarter reached about A$3.9 billion, which was up around 38.7% year-on-year. Management also cited an operating margin of around 19.5%, showing that scale is now translating into stronger profitability, led by the U.S. market.
Zip’s success in the U.S. has been driven by two main factors. First, it has pushed deeper into everyday and repeat spending categories such as groceries, healthcare and other regular household costs, rather than relying only on one-off retail purchases. This positions the product as a cash flow tool, not just a shopping add-on. Second, it has tightened credit decisioning, which has helped keep net bad debts near 1.5% of total transaction value and supported margin expansion.
This combination of smarter lending and higher-quality spending has made Zip’s U.S. operations both bigger and more profitable, a sign that its growth engine is running smoother than before.

Home Market – Solid but Slower

Back in Australia and New Zealand, Zip’s business remains profitable but has matured. Management guided to around 6% revenue growth in Australia for FY26, which reflects a more stable and slower-growing environment at home. While this part of the business provides reliable income, it no longer drives the kind of high growth that investors once associated with Zip.
For shareholders, this means the real excitement lies overseas. The local business now acts as a cash generator and brand foundation, while the U.S. division fuels expansion. In essence, Zip’s future depends on how well it can dominate one of the world’s most competitive fintech markets – the United States.

Why the Dual Listing Matters

Zip’s proposed Nasdaq secondary listing is more than headline value. Management says a U.S. listing could reshape its access to funding and market visibility.
A proposed Nasdaq secondary listing would give Zip exposure to a deeper pool of U.S. growth and fintech investors, raise its visibility in its strongest operating market, and potentially make it easier to raise capital in U.S. dollars for expansion. Zip has said this would sit alongside its existing ASX listing, not replace it.
A U.S. listing opens doors to a much larger pool of institutional investors who specialise in fintech and growth stocks. It can also improve Zip’s brand awareness among American consumers and merchants, both crucial for scaling in the world’s largest consumer economy. Furthermore, maintaining two listings carries costs and complexity, but the potential rewards could be transformative if executed well.

Rebuilding Investor Confidence

The global BNPL industry went through a painful correction between 2022 and 2024. Rising interest rates, tighter regulations, and growing consumer caution hit many providers hard. For Zip, that period forced a rethink: reduce costs, improve credit control, and focus on profitability rather than raw growth. That approach now seems to be paying off.
With losses shrinking and margins improving, Zip has become one of the few BNPL players showing sustainable financial recovery. The latest cash EBTDA margin improvement suggests it’s no longer chasing customers at any cost but is prioritising profitable ones instead. To many investors, this shift marks the start of a new phase, one that focuses on long-term value rather than explosive but unstable expansion.

The Risks That Remain

While the numbers look encouraging, Zip still faces challenges that investors shouldn’t ignore.
Competition in the U.S. remains intense, with global giants like PayPal, Affirm, and Klarna all fighting for the same users and merchants. Zip’s ability to differentiate itself, through better repayment flexibility, lower costs, or merchant integration, will determine how much market share it can retain.
Regulation is another concern. In Australia, from 10 June 2025, BNPL providers such as Zip must hold (or apply for) an Australian credit licence and comply with responsible lending-style obligations under updated credit laws. U.S. regulators are also reviewing how BNPL should be supervised, including disclosure of fees and repayment risk. Any extra compliance cost or lending restriction could affect profitability.
Lastly, credit quality remains a moving target. While bad debts are currently manageable, a worsening economic backdrop, especially in the U.S., could push defaults higher. Zip will need to maintain strict risk management if it wants to protect its margins.

How the Market Is Valuing Zip

Zip’s turnaround story has been one of the most dramatic on the ASX. Its share price has climbed more than sixfold since late 2023, reflecting renewed optimism about its recovery and U.S. prospects. The company’s FY25 cash EBTDA of A$170.3 million more than doubled year-on-year and beat expectations. Management said that if U.S. TTV grows above 35% and Australian revenue grows around 6%, FY26 cash EBTDA could reach about A$230 million, which is higher than the ~A$215.8 million figure cited by analysts.
If those forecasts hold, Zip’s valuation, though rich, may still have room to expand. However, the market’s expectations are high. Much of Zip’s current share price already factors in strong U.S. growth, meaning any slip-up in execution or market conditions could trigger a pullback. For long-term investors, it’s a story of balancing faith in management’s strategy with caution around potential volatility.

Is the Growth Engine Back?

The short answer is yes, but with conditions attached. Zip’s U.S. business has clearly regained momentum, margins are improving, and the company has demonstrated financial discipline. The growth engine is running again, but it still needs to prove it can keep running smoothly for several years.
The next 12 months will be critical. Zip has guided to U.S. TTV growth of more than 35% in FY26 and has since lifted that outlook to above 40% growth in U.S. dollar terms. If it can hit that pace, keep net bad debts near the current ~1.5% of TTV, and advance the proposed Nasdaq dual listing, the market is likely to continue treating Zip as a serious growth-plus-profitability story.
For investors, the key is patience. Zip is transitioning from a “recovery play” to a “growth-with-profitability” story, a shift that usually takes time but can create lasting value when done right.

Key Takeaways for Investors

Zip’s latest earnings have marked a clear turnaround in its financial story. The company’s FY25 results show strong improvement, with profits rising sharply and transaction volumes in the U.S. driving most of the momentum. The American market has now become the main source of Zip’s growth. Management says the U.S. arm delivers more than 80% of divisional cash earnings, positioning it as a truly global fintech player. The proposed Nasdaq dual listing could further boost investor interest, offering access to deeper capital markets and enhancing Zip’s visibility among U.S. investors. Financially, the company appears healthier than it has been in years, with lower bad debts and improved profit margins signalling a more sustainable business model. However, investors should remain cautious, as regulatory changes, rising competition, and global economic uncertainty could still test the recovery. Ultimately, while Zip’s share price has surged on renewed optimism, it’s important to assess whether its earnings growth can keep pace with market expectations to sustain those gains in the long run.

Conclusion

Zip’s story is one of resilience. After years of setbacks and heavy losses, the company has rebuilt itself into a leaner, more focused fintech. The U.S. business is showing powerful growth, the balance sheet is stronger, and the long-term opportunity remains vast. But this is still an early-stage comeback. The real test will be sustaining growth while keeping risks in check. For investors, Zip offers an intriguing mix of recovery and momentum, a company that has learned from its past and now looks ready to compete on the global fintech stage.

FAQs

• What is driving Zip’s recent earnings growth?

  Zip’s strong FY25 results were mainly driven by its expanding U.S. operations, where transaction volumes rose more than 40%. Improved credit management and reduced bad debts have also contributed to stronger margins and profitability.

• Why is Zip planning a NASDAQ listing?

  The proposed Nasdaq secondary listing is designed to give Zip greater access to U.S. capital markets, attract more growth-focused investors, and strengthen its visibility in its fastest-growing market – the United States. Zip has said it plans to keep its primary listing on the ASX.

• Is Zip profitable now?

  Yes. Zip reported a positive cash EBTDA of around A$170 million in FY25, more than double the previous year. This shift reflects its focus on sustainable growth and disciplined lending practices.

• What are the main risks facing Zip?

  Key risks include new Australian credit-style rules for BNPL from June 2025, ongoing U.S. regulatory scrutiny, intense competition from other BNPL and payments providers, and the possibility that bad debts could rise if consumer conditions weaken.

• Can Zip maintain its current growth momentum?

  That will depend on whether its U.S. business can keep growing TTV at the >35% (and now >40% in USD terms) pace the company has guided for FY26, while keeping bad debts near ~1.5% of TTV and advancing the proposed Nasdaq dual listing alongside the ASX. Margin stability and credit control are critical.