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Highlights

  • Zip Co shares jumped as much as 18.5% in morning trade following a bullish FY25 earnings guidance upgrade.

  • The company reported over 40% year-on-year transaction value growth in the U.S. market for May, with no material change in credit loss rates.

  • Zip now expects to deliver at least AUD160 million in cash EBTDA for FY25, up from the previous forecast of AUD153 million.

Zip Co Ltd (ASX:ZIP), the buy now, pay later (BNPL) company, saw its share price rocket higher on Wednesday after the release of a positive trading update and an upward revision of its full-year earnings guidance. The stock surged to an intraday high of AUD 2.76—up 18.5% from the previous close of AUD 2.33—before settling slightly lower at AUD 2.70, representing a robust 15.9% gain by mid-morning. This compares to a 0.5% lift in the broader S&P/ASX 200 Index.

According to Zip’s May update, the company continued to build on transaction value (TTV) growth across its key markets in the United States and Australia-New Zealand (ANZ). The U.S. business, in particular, delivered a standout performance with TTV rising over 40% year on year in U.S. dollar terms.

Additionally, Zip confirmed that credit loss performance remained stable across both regions compared to the third quarter of FY25—an encouraging indicator for a business heavily reliant on consumer creditworthiness. The company also highlighted its ongoing capital management strategy, disclosing that it has repurchased 12.3 million shares worth $22.6 million as part of its $50 million on-market buyback program announced in April.

The highlight of the announcement, however, was Zip’s upgraded earnings guidance for FY25. Management now expects to achieve cash earnings before tax, depreciation, and amortisation (EBTDA) of at least AUD 160 million, an increase from its earlier forecast of AUD 153 million. 

“Zip’s momentum has continued throughout May, particularly in the U.S. where TTV has continued to grow above 40% year on year, reflecting the resilience of our business model and disciplined execution of our strategy,” said CEO and managing director Cynthia Scott. “Following our continued strong performance, we have upgraded our FY25 guidance to deliver cash EBTDA of at least $160 million.”

Despite recent volatility, long-term shareholders have seen substantial gains. The Zip share price has climbed 108% over the past 12 months. However, 2025 has brought some fluctuations—shares are still down 9% year to date, though they have rebounded sharply by 127% since hitting recent lows in early April.