Key Highlights

  • Zip Co (ASX:ZIP) traded at $1.62, up 10.96%, on Volume of 59,171,083 shares during the 26 October 2026 session.
  • 1Q27 total transaction volume was $4.6 billion, up 18.0%, with US volume up 34.1% in US dollars.
  • FY27 group cash EBTDA guidance of $340 million was reconfirmed, while net Bad Debts rose to 1.97% of volume.

Zip Co Limited (ASX:ZIP) traded at $1.62, up 10.96%, on volume of 59,171,083 shares during the Trading session on 26 October 2026. The volume was unusual, meaning at least 50% above the stock's Average Daily Volume over the last month. Zip is a Sydney-based buy-now-pay-later provider operating in Australia and the United States. The company released its first quarter FY27 update on 23 October 2026, which is dated earlier than the session and is covered below.

First Quarter FY27 Results Dated 23 October 2026

Zip reported total transaction volume (TTV) of $4,603.7 million for the three months to 30 September 2026, up 18.0% on the prior corresponding period, or 25.0% in constant currency. US TTV was $3,632.6 million, up 23.8% in Australian dollars and 34.1% in US dollars, while Australian TTV was $952.4 million, up 3.6%. Total income was $376.1 million, up 17.0%, and Revenue was $373.4 million, up 17.2%.

Transactions rose 21.8% to 31.6 million, with US transactions up 38.0% and Australian up 6.3%. Revenue Margin was 8.2%, unchanged on the prior year. The company said transactions per customer rose 27.0% in the US and 14.2% in Australia. Active customers were 6.4 million, little changed on the prior corresponding period, and merchants numbered 96,600.

Credit Quality, Margins and the US Fraud Event

Net bad debts were 1.97% of TTV, against 1.65% a year earlier, with US net bad debts at 1.93%. Cash net transaction margin was 3.8% compared with 4.0%. Cash EBTDA was $65.0 million, up 3.4%, and includes $10.1 million of operating expenses relating to an external fraud event in the US. Excluding those costs, adjusted cash EBTDA was $75.1 million, up 19.5%, or 28.7% in constant currency. Operating Margin was 17.3% against 19.5%, or 20.0% on the adjusted measure.

The company said the fraud event and the measures taken to mitigate it temporarily moderated TTV and new customer growth in July and August, with September TTV in the US up 41% in US dollars.

Cash net transaction margin was 3.4% in the US and 5.2% in Australia, and US net bad debts were 1.93% of TTV. The company's target of US Credit losses in the second quarter below the first quarter reflects what it calls proactive credit management, and the FY27 target range of 1.5% to 2.0% is unchanged.

Guidance, Funding and Product Plans

Zip reconfirmed all FY27 guidance metrics, including group cash EBTDA of $340 million, up 26%. It is targeting second-quarter US credit losses below the first quarter and a range of 1.5% to 2.0% for FY27. It established its first US asset-backed security issuance, progressed a $50 million on-market share buy-back, and began an orderly wind down of its New Zealand Business in July 2026. Zip Cash is set to launch to select customers over the holiday season.

About Zip Co

Zip operates a consumer credit and payments platform, with the US the larger share of volume and revenue. Its head office is at 180 George Street, Sydney, and the quarterly figures are unaudited management financials.

The quarterly table also shows US revenue of $259.7 million, up 21.9% on the prior corresponding period, and Australian revenue of $111.5 million, up 8.3%. Group totals include New Zealand, whose business entered an orderly wind down from July 2026, and the Australian figures exclude it. Constant currency conversions use a weighted average 1Q27 Exchange Rate of 1 Australian dollar to 0.706 US dollars, which is why growth rates differ between Australian dollar and constant currency measures. Receivables in Australia were reported as growing at a double-digit rate year on year.

Risks

Net bad debts rose year on year and cash net transaction margin narrowed. The fraud event added $10.1 million of costs in the quarter, and the active customer count was little changed. Guidance and credit loss targets are forward-looking and subject to conditions in both markets.

Catalysts on Investors' Radar

Named items include the Zip Cash launch, second-quarter credit losses against the first-quarter figure and progress on the buy-back and funding programs.

Final Perspective

Zip traded on unusually high volume and a double-digit price gain on 26 October. The company's most recent update, dated 23 October, shows higher volumes and income alongside higher bad debts and a narrower margin.