Why Are ZIP Co Ltd (ASX:ZIP) Shares Down Today?

Sonal Goyal

23 October 2026 02:47 PM AEDT

Why Are ZIP Co Ltd (ASX:ZIP) Shares Down Today?

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Key Highlights

ZIP Co Ltd (ASX:ZIP) was trading at A$1.46, down 29.71%, during the 23 October 2026 trading session.
On 23 October 2026, the company reported 1Q27 total transaction Volume of A$4.6 billion, up 18.0% on 1Q26.
Zip reconfirmed its FY27 guidance of Group cash EBTDA of A$340 million, according to the announcement.

ZIP Co Ltd (ASX:ZIP) shares were trading at A$1.46, down 29.71%, during the 23 October 2026 trading session, a far larger fall than the S&P/ASX 200 (XJO), which was at 8,760.50, down 0.37% (32.70 points) at 1:16 pm AEDT. Zip operates a consumer Credit and instalment-payment platform in the United States and Australia. The move came on the same day the company released its first quarter FY27 results update, covering the three months ended 30 September 2026, in which it reported total transaction volume of A$4.6 billion and reconfirmed its FY27 guidance.

Latest Developments

1Q27 headline figures reported on 23 October 2026

On 23 October 2026, Zip said total transaction volume (TTV) grew to A$4.6 billion, up 18.0% on the first quarter of FY26, with US TTV up 34.1% in US dollars. Total income increased to A$376.1 million, up 17.0%. Transactions were 31.6 million, up 21.8%, and the Revenue Margin was 8.2%, the same as a year earlier. Net Bad Debts were 1.97% of TTV, compared with 1.65% in 1Q26, while cash net transaction margin was 3.8%, compared with 4.0%.

Cash EBTDA and the US Fraud event

The company reported cash EBTDA of A$65.0 million, up 3.4%, which includes A$10.1 million of operating expenses relating to an external fraud event in the US. Excluding those costs, adjusted cash EBTDA was A$75.1 million, up 19.5%. Zip said the event involved coordinated individuals establishing new accounts using legitimate credentials to execute unpaid transactions, and that it temporarily moderated TTV and new customer growth in July and August. The company said it had notified the relevant authorities and lodged a claim with its insurer.

Guidance, funding and Capital management

Zip said on 23 October 2026 that it reconfirmed all FY27 guidance metrics, including Group cash EBTDA of A$340 million, up 26% year on year. It said it is targeting US credit losses as a percentage of TTV in the second quarter to be lower than the first quarter, within a 1.5 to 2.0% FY27 target range. Zip also reported its first US asset-backed security issuance, a two-year US$300.0 million securitisation priced at a fixed rate Yield of 5.68%. As at 30 September 2026, it had A$452.0 million of total cash and A$224.4 million in available cash and liquidity, and had purchased 7.6 million shares for A$15.7 million under its A$50 million on-market share repurchase.

About ZIP Co Ltd

Zip Co Limited, headquartered in Sydney, provides pay-in-instalments and credit products to consumers and merchants. According to the 23 October 2026 update, the group had 6.4 million active customers and 96.6 thousand merchants at 30 September 2026, including 4.7 million customers and 32.6 thousand merchants in the US, and 1.7 million customers and 64.0 thousand merchants in Australia. The company said the wind down of its New Zealand business, which began in July 2026, is expected to complete by the end of calendar 2026. It also said it planned to launch Zip Cash, a same-day cash Loan product, to select US customers over the holiday season.

Related Sector Context

Zip operates in the BNPL and consumer finance segment of the ASX financials and Fintech landscape, where credit performance, funding costs and transaction growth are routinely reported by listed participants. Companies in the segment typically report bad debt rates and funding arrangements alongside volume metrics. The S&P/ASX 200 was down 0.37% at 1:16 pm AEDT on 23 October 2026, a considerably smaller move than that of Zip during the same session.

Risks to Weigh In

Net bad debts rose to 1.97% of TTV from 1.65% a year earlier, and Zip's US target range is 1.5 to 2.0%.
The company reported an external fraud event in the US that temporarily moderated growth and added A$10.1 million of operating expenses.
Cash net transaction margin was 3.8%, compared with 4.0% in 1Q26.
Zip's outlook is stated as subject to market conditions.
Active customers in Australia were 1.7 million, down 6.9% on 1Q26.

Catalysts on Watch

The planned launch of Zip Cash to select US customers over the holiday season.
The company's forecast that US net bad debts as a percentage of TTV in 2Q27 will be lower than in 1Q27.
Progress on the A$50 million on-market share repurchase.
Completion of the New Zealand wind down, expected by the end of calendar 2026.
The rollout of the upgraded Zigi AI assistant interface to all Australian customers in 2Q27.

Where Things Stand

ZIP Co Ltd shares traded sharply lower during the 23 October 2026 session, on the same day the company released its 1Q FY27 update. The company reported growth in transaction volume and income, higher net bad debts as a share of TTV, and reconfirmed its FY27 guidance, while the broader S&P/ASX 200 was down 0.37% at 1:16 pm AEDT.

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