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ASX

Zip declares itself a ‘true global leader’ after doubling results in 12 months

- January 21, 2021 2 MIN READ
Zip CEO Larry Diamond

● Q2 quarterly revenue of $102m (up 88% YoY).

● BNPL December revenue $40.2m (up 94% YoY).

● Transaction volume of $1.6b (up 103% YoY).

● December transaction volume of $628.4m (up 104% YoY).

Shares in buy-now-pay-later fintech Zip Co Ltd (ASX: Z1P) have jumped more than 12% in early trade on Thursday after the company release its Q2 FY2021 results for the quarter ended December 31, 2020

The business and CEO Larry Diamond were not shy in blowing their own trumpet in a release to the ASX titled “Zip cements itself as a true global BNPL leader”.

Diamond labelled its US results, through Quadpay, which the company acquired last year, “particularly exciting”.

“We are extremely pleased to deliver another exceptional set of numbers with the quarter really delivering a significant step change for the company, confirming our position as one of the fastest growing players in the sector,” he said.

“A number of strategic initiatives were delivered during the quarter, in line with our mission to become the first payment choice everywhere, every day, and we are extremely well placed to continue this momentum into 2021 as the global shift away from the broken credit card model continues.”

The business now has 5.7 million customers, up 97% on 12 months ago, with annualised total transaction volumes of around $7.5bn and annualised revenue of around$480 million.

Transaction numbers for Q2 were up 149% year-on-year (YoY) to 10.7 million, while merchants grew by 73% on 12 months ago to 38,500.

The company said Zip US (QuadPay) delivered record results in Q2 across all core metrics, which were up around 200% YoY to $673.1m in transaction volume, $47.6m in revenue and 915,000 new customers.

Quadpay’s transaction volume for Q2 FY21 increased 217% YoY to US$518.4m (AUD$673.1m).

Quadpay co-CEO Brad Lindenberg said the venture’s direct to customer and merchant partnership models are working together to produce industry-leading growth rates.

“In Q2 we achieved record app downloads (1.8m), with volumes compounding off the back of smart product decisions and investments made in prior years, particularly the ability to use Quadpay anywhere, driving customer preference,” he said.

“We are excited by this trajectory given the sheer size of the US market, and we look forward to continued and accelerated growth as the market matures in 2021 and beyond”.

While Zip raised $176.7m in equity – $120m in a share placement and $56.7m in a share purchase plan – with the majority of funds allocated to fuel US growth, the business also launched in the UK in December, kicking off with a team of 25 and 150 merchants. UK results to be included from Q3 FY21.

Shortly after midday, Zip shares had jumped 72 cents to $6.70.

 

  • Editor’s note: Zip shares ended Thursday up nearly 23% at $7.35 (+$1.36).