Zip shares surge 17% as FY26 profit jumps and FY27 earnings outlook strengthens

Zip shares surged 17% to $2.97 in early trade after the buy now, pay later group reported a sharp rise in FY26 profit and guided to further cash earnings growth in FY27.

The mid-cap company was among the market’s strongest early performers after statutory profit for the 12 months to June 30 rose 46% to $116.4 million.

Cash earnings before tax, depreciation and amortisation (EBTDA) reached a record $268.9 million, up 58% on FY25.

Zip also provided FY27 cash EBTDA guidance of $340 million, representing growth of around 26% year on year.

Total transaction volume (TTV) increased 23% to $16.7 billion during FY26, with US TTV rising 42.5% in US dollar terms.

Zip expects US TTV to grow by more than 30% in FY27 despite the increasingly larger comparison base.

The company is targeting a group revenue margin of around 8%, while operating margin is expected to expand to between 20% and 22% as management seeks to balance profitability with credit loss performance.

Net bad debts increased to 1.77% of TTV from 1.52% in FY25, although the result remained within management’s targeted settings.

Zip finished June with 6.5 million active customers and 97,400 merchants on its platform.

The company is also keeping open the possibility of a dual listing in the US as it looks to broaden its investor base.

Zip flagged a potential share consolidation, subject to shareholder approval at this year’s annual general meeting.

The company said the consolidation would “reduce the number of shares on issue to a level considered more appropriate for Zip’s size and market position and...