FY23 Results Update: Zip Achieves Strong Growth and Positive Outlook

Zip Co Limited (ASX: ZIP) has reported its full-year results for the fiscal year ending June 30, 2023 ("FY23"), demonstrating remarkable progress and setting the stage for continued success.

Key Highlights:

• Impressive Financial Performance: The company achieved a record group revenue of AU$693.2 million, marking a 16.1% year-on-year increase. Transaction volume (TTV) also reached a record high of AU$8.9 billion, up 7.0% YoY.
• Strengthened Revenue Margin: The revenue margin saw a significant improvement, reaching 7.8%, up 60 basis points YoY, surpassing medium-term targets.
• Reduced Bad Debts: Zip effectively managed its credit risk, bringing group net bad debts down to 2.0% of TTV, in line with its target range.
• Positive Cash EBITDA: The core Cash EBITDA displayed significant improvement, reporting (AU$48.2 million), which marked a 54.8% improvement in 2H23 compared to 1H23.
• Expansion and Positive Performance: The company's presence in various markets showed strong growth. Zip's US and NZ operations ended FY23 with positive cash EBITDA on a monthly basis, and the Australian business has maintained positive cash EBITDA for five consecutive years.
• Balance Sheet Strengthening: Strategic actions were taken to strengthen the company's balance sheet, including significant reductions in Senior Convertible Notes, providing a solid financial foundation.

CEO's Perspective:

Cynthia Scott, Zip Group CEO, expressed satisfaction with the strong performance, emphasizing the successful execution of the company's updated strategy. Scott noted that Zip's achievements in revenue growth, credit loss reduction, and margin expansion have occurred amid challenging market conditions.

Future Outlook:

Zip remains focused on delivering sustainable growth and innovation in core markets, aiming to achieve positive cash EBITDA during the first half of 2024. The company will maintain its commitment to responsible lending, diversity and inclusion, and environmental sustainability as it continues to evolve and expand its offerings.

As the fiscal year unfolds, Zip's quarterly reporting will provide stakeholders with clear insights into the company's ongoing progress and strategic achievements.

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