Zip Co Ltd Shares Surge 13% on Strong Financial Performance

Highlights:

• Revenue Growth: Zip Co Ltd (ASX: ZIP) reported a 28.2% increase in revenue for FY 2024, reaching $868 million.
• Profit Surge: The company achieved a 52.8% year-on-year increase in cash gross profit, totaling $373 million.
• Positive Outlook: Zip's management is optimistic about continued profitable growth in FY 2025, with a clear strategy for long-term value creation.

Zip Shares Bounce Back from Selloff

Zip Co Ltd (ASX: ZIP), a key player in the "Buy Now, Pay Later" (BNPL) sector, has seen its shares surge by 12.7% today, rebounding after a sharp decline in the previous session. As of Wednesday afternoon, Zip's shares are trading at $2.37, a significant recovery from Tuesday's close at $2.09. This impressive gain comes despite the S&P/ASX 200 Index (ASX: XJO) being down by 0.5% during the same period.

Financial Results Drive Investor Optimism

The sharp increase in Zip's share price follows the company's release of its full-year financial results for the fiscal year ending June 30, 2024 (FY 2024). While the initial market reaction was negative, leading to a 7.9% drop in share price on Tuesday, investors appear to have reassessed the results, recognizing the strong underlying performance.

Zip reported a 28.2% increase in revenue, reaching $868 million for FY 2024. Additionally, the company achieved a cash gross profit of $373 million, representing a 52.8% year-on-year increase. These results were driven by a 14.0% rise in total transaction volume (TTV), which reached $10.1 billion for the year.

Positive Outlook for FY 2025

Zip's management remains optimistic about the company's prospects for FY 2025 and beyond. CEO Cynthia Scott highlighted the company's clear strategy and identified growth opportunities in both its key markets. She emphasized that Zip is focused on driving continued profitable growth and delivering long-term value for its customers, merchants, and stakeholders.

With four consecutive quarters of profitability under its belt, Zip is well-positioned to capitalize on its recent momentum and continue its upward trajectory in the competitive BNPL space.

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