Zip has reported its final quarter results for FY23 and the company experienced growth despite ongoing BNPL industry regulatory pushback.
Zip has had a successful Q4, up on last years results. The company has reported Group quarterly revenue of $193.8m, up 21.1 percent YoY, and a transaction volume for the quarter of $2.3b, 6.4 percent YoY.
“Today we delivered another strong set of results driven by particularly strong revenue growth of 21.1%, improved margins, and a disciplined approach in how we grow and run our business,” said Zip Co-Founder, Global CEO and Managing Director, Larry Diamond. “We’ve seen the cash transaction margin for the core business improve again to 3.1% and we are pleased to deliver such a strong result despite the rising cost and interest rate environment.
“This performance yet again demonstrates the resilience and strength of the business in a challenging macroeconomic environment. Pleasingly, this result was underpinned by strong revenue growth in both our core markets, with the credit performance in the US business also a standout at 0.85% of TTV. As we finish FY23, I am excited to see the US business exit the year cash EBTDA positive on a monthly basis and very well-positioned for sustainable growth in FY24.”
In Q4, the company signed or launched with Webjet, Peloton, Sheike and Hewlett Packard in Australia, and WHP Global, Mitchell and Ness, Fevo, Hanes Brand and Lovely Wholesale in the US, further expanding its reach.
Internationally, it also completed the divestment of its businesses in Central and Eastern Europe (Twisto), South Africa (Payflex) and the Middle East (Spotii).
Zip’s core markets of ANZ and the USA performed particularly well in Q4. In the USA, revenue for Q4 was $82.5m, up 12.2 percent on Q3, and up 22.6 percent on last year. In ANZ, revenue was $100.3m, up just 4.9 percent on Q3, but up 26.1 YoY.
In May, the Federal Government announced it would soon require buy now, pay later organisations to conduct credit checks on customers as the services would be regulated as a consumer credit product. Zip, which already requires credit checks for some products has accepted the news as “business as usual” and supported the government’s proposition.
“In Australia, we welcomed the decision from Treasury to provide certainty around the BNPL regulatory framework,” said Diamond. “The option endorsed by Government was the option we supported and is aligned to our existing values and business practices, which include the capability of conducting full ID, credit and affordability checks on our customers, and holding an Australian Credit Licence.”
Overall transactions was down 2.2 percent compared to Q3, but up 2.4 percent YoY at 19.9m, reflecting the pinch felt by many.
“We acknowledge that many consumers are doing it tough with the cost of living a challenge for many households,” concluded Diamond. “We remain committed to delivering for our customers and merchants a simple, fair and easy to use product that can be used everywhere and every day, creating a world where people can live fearlessly today, knowing they’re in control of tomorrow.”
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