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Highlights

  • Zip Co (ASX: ZIP) shares jumped over 20% in morning trade following an AU$50 million share buyback announcement

  • The company plans to commence the buyback on or around 23 April, to run for up to 12 months

  • CEO Cynthia Scott says the move reflects positive operating cash flows and a focus on shareholder returns

Shares in Zip Co Ltd (ASX:ZIP) soared on Tuesday after the buy now, pay later (BNPL) company announced an AU$50 million on-market share buyback, signalling confidence in its financial position and future growth prospects.

The Zip share price leapt 20.2% in early trade to AU$1.43, bouncing back from Monday’s sharp 7.4% decline, which saw the stock close at AU$1.19. In comparison, the broader S&P/ASX 200 Index (ASX: XJO) was up 0.9% at the same time.

The sudden rally was sparked by Zip's announcement that it will begin repurchasing shares on-market from 23 April, with the program expected to run for up to 12 months. The company said the move reflects the its ongoing positive operating cash flows, and a positive outlook for profitable growth.

Zip also highlighted that the significant decline in its share price throughout 2025 may present an opportunity to repurchase stock at attractive long-term valuations.

The actual number of shares to be bought back will depend on several variables, including market conditions, Zip's share price throughout the buyback period, and other potential capital allocation opportunities. The company noted it reserves the right to modify, pause, or end the buyback program at any time.

Zip CEO Cynthia Scott said the initiative aligns with the company’s broader capital management goals:

“We continue to execute on our strategic priorities with the group generating strong operating cashflows and maintaining balance sheet strength.

The buy-back program we have announced today is consistent with our capital management framework and focuses on maximising shareholder returns. Zip will maintain a strong balance sheet following completion of the buy-back with ongoing flexibility to pursue future growth opportunities.”

A Tough 2025 for Zip Stock

Despite today’s bounce, Zip shares remain down 52% in 2025, reflecting a broader cooldown after a phenomenal 500% rally between December 2023 and November 2024. That period was marked by investor optimism, driven by falling interest rates and robust global economic forecasts that boosted demand for BNPL services.